http://english.pravda.ru/main/18/89/355/16647_Iraq.html
Russia has practically no chances to participate in Iraqi oil projects
12/19/2005 18:53
For the time being, US-based companies distribute oil contracts between
US-based contractors
Russia's cooperation with Iraq in the field of energy counts many years
of history. Soviet specialists started building key objects in Iraqi oil and
gas industry in 1967. When the USSR collapsed, and the USA launched the first
Gulf War, Russia continued to run cooperation in the fuel and energy complex of
Iraq. Russian oil company Zarubezhneft took an active part in the
implementation on the Oil for Food Program, buying and selling Iraqi oil,
delivering goods and drilling oil wells. Another company, Stroytransgas, signed
several contracts to carry out large oil and gas projects in Iraq before the
war of 2003.
Senior specialist of the Public Relations Center of the Russian Ministry
for Industry and Energy, Vasili Osmakov, said in an interview with Pravda.Ru
that the oil issue used to be too political back then: "The then Iraqi
administration was using the right for the development of new deposits as a
tool of political blackmail. The US-led military operation in 2003 cast serious
doubts on the implementation of a large number of contracts concluded with the
previous Iraqi regime.
The contract to develop the huge deposit known as Western Qurna-2 became
the largest agreement on energy cooperation between Russia and Iraq. The
document was signed by the Iraqi government and a group of Russian companies in
1997. The contract was drawn up for the period of 23 years and could be
prolonged for five more years. Lukoil's share in the contract made up 68.5
percent. The deposit contains about six billion barrels of oil; the investment
in the project was evaluated at some $4 billion. The execution of the contract
was suspended after the start of the military campaign in Iraq.
Russian and Iraqi officials conduct periodic consultations regarding the
fate of Russia's participation in large investment projects to develop oil and
gas deposits in Iraq. However, the future of many projects in Iraq's oil and
gas industry remains unknown. "All contracts have been suspended. Iraqi
officials say that all the questions will be considered after elections and the
formation of the Iraqi government. For the time being, nothing has been
planned," Vasili Osmakov said.
It goes without saying that many companies wish to invest considerable
funds in the development of Iraqi deposits. The parliamentary elections in
Iraq, which took place on December 15, will soon show, which piece of the oil
pie will go to Russia. The final election results will be exposed not later
than in two weeks. Shiites, Sunnis and Kurds will have to come to a certain
agreement to develop a common platform for the new independent Iraq. This seems
to be quite unlikely at present.
Russian companies can only take their own efforts in an attempt to
improve the situation at least to a certain extent. Russian oil giant Lukoil,
for example, organized the program of personnel training for Iraqi specialists
in Russia. A spokesperson for Lukoil's press service told Pravda.Ru that the
company delivered up to $2 million of humanitarian aid to Iraq in 2005:
excavators, loading machines and ambulance vehicles. The volume of deliveries
is planned to be increased up to $3 million next year.
Do Russian companies have any chances to participate in the development
of Iraqi oil and gas projects? Some specialists believe that many Russian
companies will have very good chances to continue working in post-war Iraq.
Many objects of the Iraqi oil industry were built according to Russian
projects, with the use of Russian equipment, etc. Other specialists are less
pessimistic in their forecasts, though. The new Iraqi government, they say, may
cancel plans and promises of its predecessors, especially under wartime
conditions. Western Qurna is the only big project, which Russian enterprises
can count on. It is highly unlikely, though, that the project will be
continued.
It is worthy of note that the US administration decided to cooperate with
its allies only: an oil company will obtain a contract in Iraq only if it comes
from the country, which participated in the military actions against Saddam
Hussein's regime.
"We do not give up on the oil projects in Iraq. We are waiting for a
certain improvement of the situation in the region. We are certain that
everyone should have equal rights to access the Iraqi oil. If a certain country
takes an obvious advantage at this point, it will affect Iraq very negatively,"
a spokesperson for Russia's SoyuzNefteGaz oil company told Pravda.Ru. For the
time being, US-based companies distribute oil contracts between US-based
contractors.
Gayane Matseichik
Discuss this article on Pravda.Ru English Forum
Read the original in Russian:
http://www.pravda.ru/economics/materials/oil/16-12-2005/71075-iraq-0
(Translated by: Dmitry Sudakov)
[Non-text portions of this message have been removed]
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