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Last Updated: Thursday, 11 March, 2004, 22:24 GMT
Lukoil wants fresh Iraq oil deal
oil pipeline
The West Qurnah deal was worth about $3.7bn to Lukoil
Russia's number two oil producer, Lukoil, is trying to revive an Iraqi oil contract cancelled by the country's former leader, Saddam Hussein.

Lukoil president Vagit Alekperov is thought to have raised the issue in talks with Iraq's oil minister, Ibrahim Bah al-Ulyum, in Baghdad this week.

Lukoil won a contract to exploit the West Qurnah field, thought to hold 15 billion barrels oil, in the mid-1990s.

But the deal went sour in 2002 after a dispute with the Hussein regime.

The Iraqi oil ministry cancelled the contract after Lukoil refused to give in to pressure from Baghdad to start work on the field in breach of United Nations trade sanctions.

The loss of the contract, worth some $3.7bn at the time, came as a blow to Lukoil, and put Russia's relations with Saddam Hussein under strain.

Adam Landes, director of oil research at Moscow-based Renaissance Capital, said Lukoil was unlikely to get a new deal on the same terms as last time.

"The politics are now very different, and our insight into the Iraqi position is that they want to definitely shift away from the original terms," he told the BBC's World Business Report.

"I think the Iraqi administration is open to Lukoil being a participant, but I think Lukoil is going to have to adjust its horizons in terms of the economics that it can achieve from this property."

Mr Alekperov said on Thursday he had signed a cooperation agreement with Iraq under which Lukoil would "help restore the material and technological base of the Iraqi oil ministry."

Adam Landes, Renaissance Capital
"His visit is primarily to engage the Iraqi oil ministry."

Lukoil 'eyeing US joint venture'
10 Nov 03  |  Business
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12 Dec 02  |  Business

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