World's Energy

MOSCOW, February 12 (RIA Novosti) - LUKoil [RTS: LKOH] hopes to regain the right to develop Iraq's giant West Qurna-2 oil field following the Russian government's cancellation of most of Iraq's debt, the company said on Tuesday. Moscow wrote off $12 billion, or 93%, of Iraq's debt to Russia on Monday, a move widely rumored to be aimed at securing lucrative oil contracts. The deal on the debt cancellation was signed during a visit by Iraq's Foreign Minister Hoshyar Zebari to Moscow. "The meeting of an Iraqi representative with the Russian government and the negotiations held between the parties give rise to optimism. We hope that the debt write-off will contribute to the promotion of our contract," LUKoil spokesman Vladimir Semakov said. Russia's largest independent crude producer LUKoil operated the first phase of West Qurna and is looking to develop West Qurna-2 in southern Iraq. The deal for both phases was signed for 23 years in 1997 under Saddam Hussein but frozen in 2002. During his meeting with the Russian government in Moscow, Zebari said a bilateral commission will be established to look into contracts suspended since the fall of Hussein's regime, which he said would demonstrate that his country is not trying to avoid issues "originating from former obligations." "The commission will also consider contracts with LUKoil and other Russian companies," he said.