RUSSIA: PRESIDENT AND CEO OF TOP OIL COMPANY LUKOIL SAYS THAT HIS NATION'S SUPPORT FOR THE UN IRAQ RESOLUTION WAS BEHIND IRAQ'S DECISION TO CANCEL AN OIL FIELD DEVELOPING CONTRACT
Record ID:
344935
RUSSIA: PRESIDENT AND CEO OF TOP OIL COMPANY LUKOIL SAYS THAT HIS NATION'S SUPPORT FOR THE UN IRAQ RESOLUTION WAS BEHIND IRAQ'S DECISION TO CANCEL AN OIL FIELD DEVELOPING CONTRACT
- Title: RUSSIA: PRESIDENT AND CEO OF TOP OIL COMPANY LUKOIL SAYS THAT HIS NATION'S SUPPORT FOR THE UN IRAQ RESOLUTION WAS BEHIND IRAQ'S DECISION TO CANCEL AN OIL FIELD DEVELOPING CONTRACT
- Date: 16th December 2002
- Summary: (EU) MOSCOW, RUSSIA (DECEMBER 15, 2002) (REUTERS) 1. SLV/LAS SNOW FALLING ON EXTERIORS OF LUKOIL OFFICE (3 SHOTS) 0.14 2. (SOUNDBITE) (Russian) LUKOIL PRESIDENT AND CEO VAGIT ALEKPEROV SAYING "On the whole, I believe that now, once this action has already been taken, that probably more than anything else it was tied to a reaction to the Russian government's position on a certain issue. [Question: Which one?] I think Russia's support of Iraqi inspectors, Russia supported this and it is well enough understood throughout the world and logical enough. [Question: So it is a way to apply pressure?] I don't want to comment on political actions, I want to look at the economic side, and I repeat there were no economic reasons because today's situation doesn't differ from the situation three years ago or six months ago." 1.11 3. SCU SMALL LUKOIL AND RUSSIAN FLAGS IN OFFICE 1.17 4. (SOUNDBITE) (Russian) ALEKPEROV SAYING "Right now, Iraq has two such contracts. One with us and our partners and one with the Chinese. Now, if they took action on us then tomorrow or the day after tomorrow they will most likely take similar action on the Chinese company. All these contracts are connected and we know the conditions on filling these contracts. (Question: So does this mean that they won't have any economic partners) Of course, they will have economic partners, and always will; but as of now the Iraqi government doesn't have any other projects as big and significant as the one that they have with our company and the Chinese company." 2.11 5. SCU STILL FRAMED PHOTOGRAPH OF ALEKPEROV WITH PATRIARCH OF RUSSIAN ORTHODOX CHURCH 2.17 6. (SOUNDBITE) (Russian) ALEKPEROV SAYING "We three partners [LUKOIL and smaller supporting companies Zarubezhneft and Mashinoimport] have sent a letter to the Iraqi side, stating our position that we consider the contract to still be in effect and that we are ready for consultations if they consider consultations necessary." 2.40 7. SCU FRAMED STILL PHOTOGRAPH OF ALEKPEROV SHAKING HANDS WITH RUSSIAN PRESIDENT VLADIMIR PUTIN 2.45 8. (SOUNDBITE) (Russian) ALEKPEROV SAYING "No, I don't have any fear that oil prices would collapse (if American companies came into the region). No, because world demand is rising and the production of oil in traditional areas of exploitation is dropping. And today it is in nobody's interest to have prices that are high or low. The price should be stable, it should stimulate use and be in the interest of buyers and the price should stimulate the oil producers. It is all connected and it should be in the interest of producers and buyers." 3.32 9. SCU STILL PHOTOGRAPH OF ALEKPEROV WITH FORMER RUSSIAN PRESIDENT BORIS YELTSIN; MV ALEKPEROV WALKING OUT OF OFFICE 3.48 Initials Script is copyright Reuters Limited. All rights reserved
- Embargoed: 31st December 2002 12:00
- Keywords:
- Location: MOSCOW, RUSSIA
- Country: Russia
- Reuters ID: LVA3U2ZU8V7AKBFT97G4YM3K1G89
- Story Text: The President and CEO of Russia's top oil company,
Lukoil, has said that his nation's support for the United
Nations Iraq resolution was behind Iraq's decision to cancel a
contract to develop the giant West Qurna oil field.
The Iraqi government announced that it was cancelling
its contract with Lukoil LKOH.RTS> last week against a
continuing backdrop of a possible military strike against Iraq
by the United States.
Lukoil President and CEO Vagit Alekperov said on Sunday
(December 15, 2002) he believed this decision was not economic but
political.
"On the whole, I believe that now, once this action has
already been taken, that probably more than anything else it
was tied to a reaction to the Russian government's position on
a certain issue. [Question: Which one?] I think Russia's
support of Iraqi inspectors, Russia supported this and it is
well enough understood throughout the world and logical
enough. [Question: So it is a way to apply pressure?] I don't
want to comment on political actions, I want to look at the
economic side, and I repeat there were no economic reasons
because today's situation doesn't differ from the situation
three years ago or six months ago."
The Iraqi move seemed to bring the region closer to war.
A Russian government source was quoted as saying that the
cancellation of the contract for LUKOIL to develop Iraq's
giant West Qurna oil field meant Moscow now had less reason to
oppose a U.S.-led war against Baghdad.
Russia, a veto-wielding member of the U.N. Security
Council and once Iraq's biggest arms supplier, has so far
opposed any unilateral U.S. military action against its former
ally.
Alekperov also said that he believes the Iraqi government
will soon take similar action against a Chinese company
involved in a similar contract.
"Right now, Iraq has two such contracts. One with us and
our partners and one with the Chinese. Now, if they took
action on us then tomorrow or the day after tomorrow they will
most likely take similar action on the Chinese company. All
these contracts are connected and we know the conditions on
filling these contracts. [Question: So does this mean that
they won't have any economic partners?] Of course, they will
have economic partners, and always will; but as of now the
Iraqi government doesn't have any other projects as big and
significant as the one that they have with our company and the
Chinese company."
But Lukoil said it was leaving the door open for further
cooperation and sent an official letter to the Iraqi
government stating that it still considered the deal to be in
effect.
"We three partners (LUKOIL and smaller supporting
companies Zarubezhneft and Mashinoimport) have sent a letter
to the Iraqi side, stating our position that we consider the
contract to still be in effect and that we are ready for
consultations if they consider consultations necessary,"
Alekperov said.
The future of Iraq's crude reserves, the world's second
largest after Saudi Arabia's, are at the centre of a
diplomatic tug-of-war between countries hoping to grab a share
of Baghdad's oil wealth once United Nations sanctions are
lifted.
Russian oil companies were worried that they could lose
the right to develop West Qurna to U.S. firms if the United
States ousts Iraqi President Saddam Hussein.
But Alekperov said he did not fear a possible collapse of
oil prices even if firms from the United States or other
countries were to come into Iraq.
"No, I don't have any fear that oil prices would collapse
[if American companies came into the region]," he said. "No,
because world demand is rising and the production of oil in
traditional areas of exploitation is dropping. And today it is
in nobody's interest to have prices that are high or low. The
price should be stable, it should stimulate use and be in the
interest of buyers and the price should stimulate the oil
producers. It is all connected and it should be in the
interest of producers and buyers."
Iraq's most prized oil asset, West Qurna is worth 3.7
billion of U.S. Dollars initial investment and is expected to
yield 600,000 barrels a day of oil production.
LUKOIL led a Russian consortium that signed the contract
in 1997.
The 12-year-old U.N. embargo bars investment in Iraq's oil
industry but Russian and Chinese companies had signed
contracts and were ready to start work once the embargo is
lifted.
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