Lukoil’s loss of Iraqi oilfield contract final
Iraq broke a $3.8 billion oilfield development contract, for the second time, with Russian oil giant Lukoil. The Ministry of oil insisted that the decision was final and that the government will not enter into any new discussions with Lukoil on the matter.
The contract to develop the West Qurna-2 oil field, originally signed in 1997, was cancelled for the first time in December when the Iraqi government demanded Lukoil be replaced by another Russian company. The contract was scrapped presumably because Lukoil was conducting quiet talks with the United States and Iraqi opposition.
The Iraqis accused Lukoil of trying to guarantee its rights to the field in case a US-led military strike on Iraq topples President Saddam Hussein’s regime and institutes a new government. The deal cannot be implemented as long as UN sanctions are in place.
The looming attack on Iraq has not discouraged the Russians from advancing their oil interests in the beleaguered Gulf country. According to Lukoil spokesman Dmitry Dolgov, Baghdad has not officially informed the company of any changes to the agreement, reported Interfax. "And if there are any, it would be a subject for the arbitration court in Geneva to decide on," he said.
Iraq sits atop the world's second-largest oil reserves, after Saudi Arabia. West Qurna-2 oilfield is estimated to contain about 2.5 billion tons of oil reserves. It is expected, once operated, to have the capacity to produce up to 600,000 barrels of oil per day (bpd). — (menareport.com)
© 2003 Mena Report (www.menareport.com)