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Westwood's total of 10-under 134 put him level with Ryder Cup teammate Oliver Wilson (68), Soren Kjeldsen (67) and Johan Edfors (70).
First-round leader Francesco Molinari was disqualified after his 73 for signing for the wrong score on two holes.
He transposed the scores by signing for a four on the 12th when he made a six, and a six on the 13th when he made a four. He did not notice the mistakes until after the round.
Scottish duo Gary Orr and Alastair Forsyth shot 67 and 68 respectively to finish one shot behind the leading quartet.
Padraig Harrington birdied four of his last eight holes after the weather improved and a 68 made sure he survived the cut.
But John Daly only managed a 75, which left him on 1 under and two outside the projected halfway cut at the end of the day.
It rained heavily overnight and during the start of the second round, but the rain eased off late in the morning. Winds were again light at the County Louth course in northeast Ireland but are expected to pick up on Saturday.
Westwood skipped this month's Players Championship as part of his long-term preparation for next month's US Open, where he finished third last year.
He said he was still having problems with his short game, a perennial weakness, although putting was a big factor in his 66 Friday.
"I'd give myself four out of 10 for my short game today. Fortunately I didn't have to chip that often," he said.
Wilson has been battling neck and chest problems in recent weeks, which forced him to pull out of the Players Championship at Sawgrass, but said they had no effect on his game today.
"The neck's not 100 percent yet but it's not affecting my golf. The chest problem is also fine again, so no problem," he said.
Kjeldsen, who started at the 10th, bogeyed the 18th but made birdie-birdie-eagle at the start of the front nine.
Former US Open champion Michael Campbell missed the halfway cut despite a 72, but was pleased just to complete 36 holes. He had been bothered by a shoulder injury for the last six months, which forced him to retire from several recent events.
"So I'm glad to get two rounds under my belt ahead of the next few weeks. I can play 72 holes now," he said.
