LUKoil believes it's too early to judge Qurna's project

The management of the LUKoil company believes it premature to speak about the prospects of the contract for developing the West Qurna deposit in Iraq.

"Today we are in contact with the Iraqi Oil Ministry. I believe that the consideration of our contracts is at the stage of the process of negotiations which, unfortunately, have not yet started," said the head of the oil company, Vagit Alekperov.

In this way he commented on the statements of Iraqi Oil Minister Ibrahim Bahr al-Ulum who did not exclude the revision of the contract with LUKoil to a value of 7.3 billion dollars for developing the West Qurna deposit. The explored reserves of this deposit are estimated at six billion barrels of oil.

However, executive vice president of the Moscow International Oil Club Torgul Bagirov believes that the contracts will not be re-distributed in Iraq, including the contracts with LUKoil.

"We do not believe any re-distribution will take place in Iraq. The agreement with LUKoil for developing the West Qurna deposit was recognized by the international community. Most likely, nobody will revise it," Bagirov told RIA Novosti.

"Possibly, however, its implementation may differ. For example, implementation jointly with anybody else, or new alliances may be formed," he added.

The LUKoil's Iraqi contract is legally valid, therefore its rupture or revision can entail serious legal actions.

"Any other company which will come to this deposit will be made to pay tens of billions of dollars. None of the big Western companies will risk it," he said.

The contract for developing the second stage of the West Qurna-2 oil deposit in Iraq was signed in 1997 by the Iraqi Oil Ministry, on the one side, and the LUKoil company, the Russian foreign economic association Zarubezhneft and the State Foreign Economic Association Mashinoimport, on the other side.

The term of the contract on conditions of the Product Sharing Agreement is 23 years, and it can be prolonged for another five years. The share of LUKoil in the project makes up 68.5 percent, of Zarubezhneft and Mashinoimport - 3.25 percent each, respectively. The SOMO organization (25 percent) takes part in the project from the Iraqi side.

However, in 2002 Baghdad annulled the contract, alleging that LUKoil did not fulfill its terms.

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