World's Energy

24 March 2008 - Upstream OnLine - Russian President Vladimir Putin called on Iraq to support Russian investments as the head of oil major Lukoil landed in Baghdad in a bid to revive a Saddam Hussein-era oil deal. Moscow has long fought hard to regain some of the Iraqi positions lost after the US led invasion, including the $3.7 billion deal to develop the West Qurna oilfield. Putin's appeal to Iraq, in a letter to Iraqi Prime Minister Nuri al-Maliki, was the highest-level intervention to date. "Our companies are ready to increase their contribution to rebuilding and modernising Iraq's economic infrastructure, primarily in the oil and gas industries where we have accumulated large experience and have good prospects for the future," the Kremlin quoted Putin as saying in the letter. "I hope the Russian business community's intent to broaden cooperation will receive appropriate support from the Iraqi leadership," the Kremlin quoted the letter as saying. According to Reuters, the Kremlin said the letter specifically mentioned a project to rebuild a pipeline from Iraq's Kirkuk oilfield to Syria's Mediterranean terminal of Banias, in which Russian firms hope to participate, as well as the West Qurna field. Lukoil head Vagit Alekperov and Russia's deputy foreign minister, Alexander Sultanov are currently visiting Baghdad to meet Iraq's political leaders. "The chief of Lukoil will discuss with the Iraqi oil ministry the former oil contracts which have problems, one of which is the contract for West Qurna," Hoshiyar Zebari, Iraq's foreign minister, told reporters. LUKOIL has long hoped to revive the 1997 deal to tap one of Iraq's biggest oil deposits, but talks have been complicated by the fact that the contract was scrapped by the government of Saddam Hussein shortly before it was toppled in 2003. Baghdad is also in discussions with Chevron and Total to develop the same field. "We suggested to them they had better to discuss this issue directly with the oil ministry to reach a satisfactory compromise for both sides and not to be the prisoners of the past," Zebari said. "This contract, according to the Iraqi government, is cancelled," he added.