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Shahristani on Moscow mission



By Upstream staff 

Iraqi Oil Minister Hussein al-Shahristani started a visit to Russia today as Moscow presses Baghdad for a bigger oil industry role in return for writing off $10 billion of Iraq's debt.

Hussain al-Shahristani will meet Russian Energy Ministry Viktor Khristenko to discuss "a wide range of partnership issues in the energy sector", Khristenko's spokesman said.

Russian oil company Lukoil said a meeting between top executives and Shahristani was also scheduled for tomorrow as Lukoil counts on reviving a $4 billion Saddam-era deal to develop Iraq's huge West Qurna field, Reuters reported

Russia's Finance Ministry said this week it was counting on the visit to help unlock a deal to write off Iraq's debt, implying Moscow would use the debt as a trump card to gain a big slice of Iraqi oil reserves.

Deputy Finance Minister Sergei Storchak declined to disclose Russia's proposals when briefing reporters on Monday, saying only that Moscow had a clear plan how to settle the Soviet-era debt for supplies of military equipment.

In May, Iraq's finance ministry said Russia wanted to participate in the development of another major field, Rumaila, in return for a debt write off, but added such a condition was unacceptable for Baghdad.

RIA Novosti news agency reported Shahristani as saying today after landing in Moscow that Russian companies will get no preferential treatment in Iraq.

He also said Lukoil would have to bring the West Qurna contract in line with new Iraqi legislation if it wanted to keep it. He declined to say what Lukoil’s chances were of keeping the field.

Analysts have long been sceptical about Lukoil's prospects of returning to West Qurna, one of Iraqi biggest oil deposits, given heavy US influence on the country's government.

The deal's revival is complicated by the fact that the government of Saddam Hussein scrapped it just before being toppled in 2003, saying Lukoil had done nothing to launch the field, which could produce 600,000 barrels per day.

But analysts' perception changed after US oil supermajor ConocoPhillips built up a 20% stake in Lukoil, and said it hopes to be an active partner on West Qurna if security and legal conditions allow.


Wednesday, 08 August, 2007, 18:15 GMT  | last updated: Wednesday, 08 August, 2007, 18:15 GMT

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