Iraq halts Russian and Chinese oil deals

Iraqi oil is coming back onstream

The US-run Iraqi administration has cancelled or suspended three oil contracts with Russian and Chinese firms signed by the ousted government of Saddam Hussein.

Thamir Ghadhban, the US-appointed de facto Iraqi oil minister, said on Saturday all pre-war contracts would be re-evaluated and new deals announced soon.

"We will examine each one on its legal, economic merits," he said.

But he added that Russia's biggest oil company Lukoil had already lost a contract in West Qurna while a Chinese deal to develop the al-Ahdab field was suspended by "mutual agreement".

No details were given about the third contract.

His comments come just days after the UN Security Council lifted sanctions against Iraq.

French, Russian and Chinese companies all won contracts in recent years for work in Iraq. Their governments opposed US war plans at the UN Security Council.

Tender process

Mr Ghadhban said that contracts would be soon awarded to international oil companies to restore oil production and nations who had opposed the war would not be discriminated against.

"We will definitely be dealing with all international oil companies in a fair and just way," Mr Ghadhban said

"We will not target anyone."

He estimated that investment to restore production would be in the hundreds of millions of dollars and not billions.

Figures released by the Iraqi oil director put production at about 700,000 barrels per day (bpd). He said pre-war levels of 3 million bpd would be achieved by the end of the year.

Exports are expected to resume within weeks.