LukOil's Contract Annulled

Russian oil tycoons are eager to cooperate with their American and British partners.
Iraq may reconsider its contract with a Russian oil company "LukOil" regarding a project of "Western Qurna-2". Iraqi Minister Ibragim Bahr Al-Ulum allows for such possibility, reports RIA "News".

Arab newspaper "Ash-Shakr Al-Ausat" quotes the minister saying that "all contracts signed by Saddam's government will need to be reconsidered in terms of their eligibility and expediency for the Iraqi people." The minister is currently visiting Kuwait.
According to Iraqi Minister Ibragim Bahr Al-Ulum, Russian minister of energy Igor Usupov has kindly invited him to visit Moscow for negotiations. Reuters however, was unable to confirm the actual date of their meeting. 
 
The contract of "West Qurna-2" is part of an agreement of the product sharing plan signed by LukOil (possessing 68,5%), "ZarubejNeft" (3,25%), "Mashinoimport" (3,25%) and Iraqi facility SOMO (25%) in 1997. It has been approved by the oil Ministry in Iraq.
 
In 2002 however, the agreement was annulled by Hussein's government, referring to LukOil's failure to comply with the contract. The company was accused for not developing new oil fields thus slowing oil production. LukOil in turn, states that the initial agreement will remain at power. The company's representatives claimed that certain conditions could not have been followed due to UN sanctions, and the initial agreement is ought to be considered valid.  
  

According to a representative of the American administration, the company of Vagit Alekperov (LukOil) is no longer allowed to work in Qurna. This statement has later been refuted however. LukOil's case has been postponed.

Apparently, right before July 1 LukOil stated that a new 100-day countdown has begun with the removal of the UN sanctions in Iraq. The company has to begin working in the suggested timeframe. As it is commonly known, the UN has canceled its sanctions against Iraq on May 22. So the initial 100-day countdown has already expired in August.

As a reminder, there appeared some rumors about LukOil's possible alliance with colleagues from the US ("Fluor" company) and Great Britain (Amec PLC). All of these companies received several decent contracts from the US administration in Iraq. Such companies as Halliburton and Bechtel Group acquired major contracts. The alliance plans to receive additional contract from American army engineering forces to restore oil extraction in the northern and southern parts of Iraq. If this comes true, Fluor and Amec will turn into major developers in the area. Their alliance with LukOil however, may considerably increase their share in Iraq.

It should be noted, that "West Qurna-2" possesses 6 billion barrels of oil. Project investments might reach up to 4 billion USD, reports RBK.

Sources: Information Agencies