The largest privately owned Russian oil company Lukoil has declared force majeure – a legal step that suspends its obligations due to circumstances beyond its control – at Iraq’s West Qurna-2 oilfield, one of the country’s largest, after Western sanctions disrupted its operations, four sources told Reuters.
The United States imposed sanctions on Russia’s two largest oil companies, Rosneft and Lukoil, last month. The measures against Lukoil target key subsidiaries, such as Lukoil West Siberia and Lukoil Kaliningradmorneft, which are involved in onshore and offshore oil and gas development.
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The United Kingdom also imposed 90 sanctions targeting Russia’s energy sector in October. Britain’s measures hit the country’s largest oil companies, their global partners, and the “shadow fleet” that helps Russian transport oil under current restrictions.
Lukoil informed Iraq’s oil ministry last Tuesday that sanctions had made it impossible to continue normal operations at the field, Reuters reported.
It the situation is not resolved within six months, Lukoil plans to shut down production and withdraw from the project entirely, a senior Iraqi oil official told the media outlet.
Last week, Iraq’s state oil marketer SOMO cancelled loadings of three crude cargoes from Lukoil’s share of production at West Qurna-2, also citing the sanctions, Reuters previously reported.
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US sanctions are also hitting Russian oil exports to India, with major Indian refiners set to see deliveries fall to nearly zero. The latest Washington restrictions would make further Russian oil imports to India nearly impossible, executives at several refineries told Bloomberg last month on condition of anonymity.
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