Iraq aims oil threats at
Russian firms
BAGHDAD - Iraq threatened
Sunday to terminate contracts
signed with Russian and Chinese
oil firms to develop the country's
southern oil fields that had not
been fulfilled.
"The contracts have been signed
to be carried out, and any
contract that has not been
honoured will be terminated,"
Iraq's deputy oil minister Faiz
Shahin warned in the weekly
Al-Nassiriya newspaper.
Furthermore, Shahin said Iraq
was in negotiations with
Indonesian, Irish and Malaysian
firms to develop its oil sector,
adding that it had "signed a
contract with an Indian firm for
exploratory work in the south of
the country."
Chinese and Russian firms have received similar warnings in the past for not
honouring oil contracts to develop Iraq's southern Al-Ahdab and Al-Qorna
oilfields.
The Chinese contract for the Al-Ahdab field, whose production is estimated at
90,000 barrels per day (bpd), covers an investment of 660 million dollars over 26
years after which production will revert to the Iraqi government.
In 1997, Russia's biggest oil company Lukoil and two other Russian firms,
Zarubezhneft and Mashinoimport, signed an accord with Iraq's oil ministry on
developing Iraq's West Qurna oil field.
However, Lukoil has been able to carry out only a limited amount of work in Iraq
so far, with the UN-imposed sanctions crippling Iraq's oil industry.
The West Qurna agreement was the first to be signed between Iraq and an
international oil firm since the United Nations imposed sanctions on Baghdad in
1990 following its invasion of Kuwait.
The 23-year deal, worth 3.5 billion dollars, covers the development of the 7.8
bllion barrels of proven reserves in the Mishrif and Yamamah formations in the
north of West Qurna.
Sunday's warning coincides with a visit of a delegation of 20 oil experts and
businessmen from Russian firm Slavneft to discuss ways of "continuing
cooperation in the oil and trade fields".
Slavneft signed an agreement with Iraq at the end of last year to take part in the
development of Subba oil field, whose reserves are estimated at 100 million
tonnes, the Interfax news agency in Moscow reported.
Iraq has turned to foreign oil companies to raise funds to develop its energy
sector which was hard hit by the 1980-1988 war with Iran, the 1991 Gulf War,
and the 10 years of UN sanctions.
Iraq has said it needs around 30 billion dollars in investments in the oil sector,
half of which would be for new fields, to triple its output capacity to six million
bpd.
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