After a decade of angling for Iraqi oil, Russian oil company Lukoil is gearing up for new project

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http://www.ft.com/cms/s/0f90bf9c-f298-11db-a454-000b5df10621.html

Moscow backs Lukoil Iraq project

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Vagit Alekperov, Lukoil’s chief executive, said in an interview on Tuesday: “The Russian government supports us, the foreign ministry supports us, the president of the federation supports us. They support the idea of putting those Iraqi fields (into production) as soon as possible. In all these areas we have the support of the Russian government.”

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West Qurna is believed to hold as many as 11bn-15bn barrels of recoverable oil reserves and has a potential to produce as many as 1m barrels a day, making it one of the world’s biggest fields.

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But at least one US company would benefit if Iraq’s oil ministry assigned the development of West Qurna to Lukoil. In 2004 ConocoPhillips, the US’s third largest energy group, formed a strategic partnership with Lukoil in which the US company gradually expanded its stake to just shy of 20 per cent. At the time of the announcement, the companies noted the eventually development of West Qurna as one of their motives for the deal.

Lukoil has spent more than a decade angling for West QurnaIn spite of United Nations sanctions, the company signed a deal with Saddam Hussein, Iraq’s deposed president, in 1997 to develop the field. But in 2002, shortly before the US invasion, Baghdad rescinded the deal, saying it was angered by Lukoil’s attempts to get assurances from the opposition that it would keep the contract in case Mr Hussein’s regime fell.

In the past two years Lukoil has spent $20m to train 1000-2000 Iraqi oil field engineers in Russian fields, put another 100 through Russian universities and provide equipment for Iraq’s oil industry.