IRAQ: GOVERNMENT SIGNS A NEW OIL DEVELOPMENT DEAL WITH RUSSIA IN MOVE TO REPAIR DIPLOMATIC RELATIONS

Record ID: 344898

  • Title: IRAQ: GOVERNMENT SIGNS A NEW OIL DEVELOPMENT DEAL WITH RUSSIA IN MOVE TO REPAIR DIPLOMATIC RELATIONS
  • Date: 18th January 2003
  • Summary: (W5) BAGHDAD, IRAQ (JANUARY 17, 2003) (REUTERS) 1. SLV EXTERIOR OF THE MINISTRY OF OIL IN BAGHDAD; SLV SIGN FOR MINISTRY (2 SHOTS) 0.11 2. SLV INTERIOR NEWS CONFERENCE, DELEGATES AROUND TABLE 0.18 3. MV INDREA MATLACHOV, FIRST DEPUTY MINISTER FOR POWER GENERATION IN THE RUSSIAN FEDERATION AND IRAQ'S DEPUTY OIL MINISTER HUSSEIN AL-HADITHI, DEPUTY IRAQI OIL MINISTER SIGNING DOCUMENTS; SLV DELEGATES; MV MATLACHOV AND HUSSEIN AL-HADITHI SHAKING HANDS; SCU DELEGATE (4 SHOTS) 0.58 4. (SOUNDBITE) (Russian with Arabic translation overlaid) INDREA MATLACHOV, FIRST DEPUTY MINISTER FOR POWER GENERATION IN THE RUSSIAN FEDERATION SAYING THAT IT IS A ONE BILLION DOLLAR DEAL AND THAT THEY HOPE TO IMPLEMENT IT SOON. 1.43 5. MV DELEGATES LISTENING 1.47 6. SLV UN VEHICLES; SLV UN INSPECTORS ARRIVING AT AL FALOUJA SITE, CHLORINE-GAS PRODUCTION FACILITY; MV INSPECTORS WALKING INTO SITE, CAMERAMEN STOPPED FROM FILMING (4 SHOTS) 2.14 7. MV PHOTOGRAPHERS LAID ON GROUND SHOOTING FILM UNDER THE GATES OF THE SITE 2.21 8. SLV INSIDE FROM UNDER GATES OF INSPECTORS WALKING AROUND; SLV INSPECTORS RETURNING TO THEIR VEHICLES (3 SHOTS) 2.58 Initials Script is copyright Reuters Limited. All rights reserved
  • Embargoed: 2nd February 2003 12:00
  • Keywords:
  • Location: BAGHDAD, IRAQ
  • Country: Iraq
  • Reuters ID: LVA99Z4MIOJ6T1TSGWZ88VMGCRWO
  • Story Text: Iraq has moved to repair diplomatic relations with
    Russia, damaged by the cancellation in December of a key
    oilfield contract, by signing a new oil development deal and
    starting negotiations on more.

    Meanwhile UN weapons inspectors continued their duties and
    visited a chlorine-gas production facility.

    Iraq's oil ministry said on Friday (January 17, 2003) it had
    awarded a firm contract to Russia's Stroitransgaz, an oil and
    gas construction company, to develop block four in Iraq's
    Western Desert.

    It also initialled two more and started negotiations with
    Zarubezhneft, Russia's umbrella company for state holdings
    abroad, on the giant Bin Umar field.

    That news will come as a shock to French oil major
    Totalfinaelf which has long been earmarked for the 3.4 billion
    U.S dollars Bin Umar development, alongside another big
    prospect, Majnoon.

    The initialled contracts were with Soyuzneftegaz for the
    100,000-barrel-a-day Rafidain field in southern Iraq and with
    Tatneft for block nine in the Western Desert.

    The deals, signed by Russia's deputy energy minister Ivan
    Matlashov and Iraq's oil ministry under-secretary Hussein al-
    Hadithi, provide a boost to political relations as Baghdad
    seeks to prevent a military assault by the United States.

    Moscow is Baghdad's closest ally on the United Nations
    Security Council and analysts said the deals were an attempt
    by Baghdad to mend fences.

    The deals come after the cancellation by Iraq of the
    prized contract for its biggest prospect, West Qurna. Rights
    to the 3.7 billion U.S dollar development were held by LUKOIL
    until mid-December when Baghdad pulled the plug, saying the
    Russian company had failed to meet the terms of the deal by
    not starting development work.

    After the West Qurna cancellation there was speculation
    that the Iraqi authorities had taken offence at contact
    between LUKOIL chief Vagit Alekperov and Iraqi opposition
    leaders.

    The opposition hopes to take charge in Baghdad if the
    United States forces Iraqi President Saddam Hussein from
    office with a military assault that could be just weeks away.

    Since the cancellation long-standing Iraqi Oil minister
    Amir al-Rasheed has been replaced by Samir al-Najm, an old
    hand from the presidential office.

    Iraqi oil reserves, second only in size to those of Saudi
    Arabia, are at the centre of a tug-of-war between countries
    keen to get their hands on Baghdad's oil wealth if Saddam is
    overthrown.

    Apart from Russia, companies from China, France, Turkey,
    Britain, Vietnam, South Korea, Italy, Spain and Malaysia and
    Canada have held talks with Baghdad.

    But it is the U.S. oil majors that are expected to play
    the major role in any post-Saddam development, a prospect that
    has angered Russian companies.

    United Nations sanctions forbid any investment in Iraq
    until the lifting of Gulf War sanctions.

    The UN weapons inspectors continued with their duties by
    visiting the Al Falouja site, chlorine-gas production
    facility.

    On Thursday (January 17) the inspectors had found empty
    rocket warheads designed to carry chemical warfare agents. A
    defiant speech by Iraqi leader Saddam Hussein on Friday and
    renewed warnings from United Nations chief weapons inspector
    Hans Blix have ensured that tensions over the inspections
    remained high.


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