Lukoil to pursue Iraqi oil field

Lukoil, Russia's largest oil producer, could develop the West Quarn-2 oil field in south Iraq if negotiations go to plan.

Russian Energy Minsiter Sergei Shmatko said in a statement that he was visiting Baghdad next month to discuss Russian participation in the development of the oil field.

Lukoil has had previous business dealings with Iraq, with the company signing contracts with the Hussein regime to develop West Qurna. That contract was suspended however with the invasion of Iraq by coalition forces in 2002.

In 2008, agreements between the two parties recommenced with Lukoil amending the original contract in order to develop the field through its second development phase.

The Iraqi Oil Ministry is planning on holding a summit in August in order to attract companies to bid for the West Qurna project, but Lukoil is currently the front runner thanks to the Russian government recently writing off over $12 billion of Iraq's debt.

Shmatko said that his Baghdad visit was simply to 'focus on Lukoil's potential involvement in West Quarna-2' according to the Russian Information Agency.

Whilst Lukoil may appear to be a shoe-in for the project, Iraq has imposed tough terms on several on its oil field developments, dissuading several potential bidders. Thus far, only BP and China National Petroleum Corp. have agreed to the country's specific terms for the development of the Rumaila field in southern Iraq.

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