Lukoil, Iraq in Talks to Revive West Qurna Oil Deal

AMMAN May 11, 2007 (Dow Jones Newswires)

Russian oil producer OAO Lukoil Holdings (LKOH.RS) is in talks with the Iraqi government to revive a deal signed with the previous regime to develop the giant West Qurna oil field, a senior official with the company said late Thursday night.

Lukoil struck an agreement with former Iraqi leader Saddam Hussein in 1997 to drill at West Qurna, which is among the most promising in Iraq, with an estimated reserve capacity of 4 billion barrels of oil. Saddam severed the $3 billion contract in 2002.

"We have started negotiations with the Iraq government on West Qurna oil field," Lukoil spokesman Mikhail Leonyiev-Romakov told Dow Jones Newswires.

Iraq's Oil Minister Hussein al-Shahristani said last week he had told representatives from Lukoil in Vienna that their West Qurna contract needed to be renegotiated and reviewed.

West Qurna is one of the priorities in the Iraqi oil ministry's list of oil fields that need to be developed as soon as an oil and gas law is issued. Al-Shahristani said last week that the draft law has been submitted to parliament for final approval.

Lukoil is one of 700 foreign companies that took part in an exhibition called 'Rebuilding Iraq 2007,' which was concluded in Amman Thursday.

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