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Putin calls on Iraq to help LUKoil revive oil deal

Russian President Vladimir Putin on Monday called on Iraq to support Russian investments as the head of oil major LUKoil arrived in Baghdad in a final bid to revive a Saddam Hussein-era oil deal.

Moscow has long fought to revive some of the Iraqi contracts lost after the US-led invasion in 2003, including a $3.7 billion deal to develop West Qurna oilfield in southern Iraq. 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 modernizing 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. 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.

The head of LUKoil, Russia’s second-largest oil firm, Vagit Alekperov, and Russian deputy foreign minister, Alexander Sultanov, are in 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 wants to revive the West Qurna deal to tap one of Iraq’s biggest oil deposits. But Maliki’s energy adviser, Thamir Ghadhban, told Reuters last week that Baghdad was close to finalizing a technical support contract with Chevron and Total to develop the same fields. “We suggested to them they had better 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 (LUKoil) contract, according to the Iraqi government, is cancelled.”

The Iraqi oil ministry declined to provide any details about the meeting between Oil Minister Hussain al-Shahristani and LUKoil’s Alekperov. The Russian delegation will next meet President Jalal Talabani on Tuesday to discuss oil investment in northern Iraq’s semi-autonomous Kurdistan region. LUKoil’s shares closed 4.39% up on Russia’s main MICEX bourse, outperforming the broader oil and gas index.

Russia last month wrote off most of Iraq’s $12.9 billion debt to it and signed a cooperation agreement that Moscow said would open up Iraq for $4 billion in investment from Russian companies. (Reuters)