Iraq’s oil minister said on arriving in Moscow Wednesday that Russian crude producers will have to compete on equal terms with other companies in the oil-rich country.
Contracts for Russian companies, including LUKoil crude producer, signed under Saddam Hussein were frozen before the new government was formed in Iraq, the world’s second oil-rich country after Saudi Arabia. “There will be no privileges for any country or any company,” Hussain al-Shahristani said. LUKoil is seeking to return to the Iraqi oil sector to revive a 1997 production-sharing agreement it struck with the Iraqi Oil Ministry to develop the West Qurna-2 deposit in southern Iraq until 2020. The oil field has estimated reserves of 6 billion barrels, with investment expected at $4 billion.
Shortly before Saddam’s fall in late 2002, Iraq said the West Qurna-2 deal had been terminated for failure to meet its terms. LUKoil continues to consider the contract valid. “LUKoil will have to compete with other firms on equal terms and in accordance with new oil laws,” Shahristani said. Iraq’s proven oil reserves make up 112 billion barrels, and according to some estimates, possible reserves could reach up to 200 billion barrels. (rian.ru)