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24

Iraq turns over a new leaf in its petroleum history

During the three-day working visit to Moscow, Iraqi Oil Minister Hussein Al-Shahrastani made it clear that Russia wouldn’t get special conditions in the country’s hydrocarbon market anymore. When the new law on oil and gas in Iraq come into force, all intending operators will be able to participate in tenders for development of oil deposits on equal terms.

During the three-day working visit to Moscow, Iraqi Oil Minister Hussein Al-Shahrastani made it clear that Russia wouldn’t get special conditions in the country’s hydrocarbon market anymore.

When the new law on oil and gas in Iraq come into force, all intending operators will be able to participate in tenders for development of oil deposits on equal terms.

The meeting with journalists started with an embarrassing case. Iraqi translator made a mistake and, as a result, the Minister’s greeting sounded as: «I am very happy to arrive in Soviet … I’m sorry … in Russia ». However, his slip of the tongue just showed how fast the political policy can change. Quite recently the Soviet Russia was a big friend of Saddam’s Iraq, but nowadays a new Russia is trying hard to set mutually profitable relationship with Iraq, without Saddam however.

«I came to find out more about the relations between Iraq and Russia», admitted Al-Shahrastani. Really, Russia will have to start building new relations with Iraq from the very beginning as all arrangements reached before are to be reconsidered. Now tenders for Iraqi deposits will be won by those companies that will manage to offer the most favorable conditions to Iraq. «The selection of companies will be carried out only from the viewpoint of benefit for economy of Iraq. Any other factors, including political ones, won’t influence the choice», the minister said.

The hottest discussions during the visit of Al-Shahrastani were held around Western Kurna-2 oil field. Ten years ago Russian oil major Lukoil and Saddam Hussein's government signed a contract under which the Russian were to receive the license for oil exploration and production at one of the richest Iraqi oil deposits. The contract was broken in 2002. Hussein Al-Shahrastani emphasized that the contract wouldn’t be renewed and the rights for development of the deposit would be delegated to the Iraqi state oil company. This particular company is to define what type of a contract will be the best for the country. Futhermore, the Minister added that Lukoil had all the chances to win the bid for the project of Kurna-2, since the Russian company knows firsthand about the Iraqi oil and has wide expertise and experience.

In the field of hydrocarbon production Iraq has to live in a new way after the new oil and gas law will come into force, which is on approval in Iraqi parliament now. According to the forecast of the country’s Ministry of Oil, the law will become operative in September, 2007, and from this very moment the first oil development tenders will be called.

Nowadays Iraq feels a strong need of billions of investments. Therefore, the Oil Minister, speaking to the journalists, tried to remind that his country is a real tidbit for the world’s oil majors. According to the plans of the new government, by 2010 the oil production in the country will reach 4 million barrels a day and, considering the development of new deposits, in 5 years Iraq will be able to produce 6 million barrels a day.

The general atmosphere of negotiations with Russia was very favorable and all the Russian companies, participated in negotiations, expressed readiness to renew their operations in Iraq, Al-Shahrastani said.

Author: Viktoria Yudina

Source : Neftegaz.RU Magazine