LUKOIL Faces Difficulties in Talks on Iraqi Field: LUKOIL President

Oil&Gas Materials 3 July 2008 11:04 (UTC +04:00)

Azerbaijan, Baku, 2 July / corr Trend S.Aliyev / Russian company LUKOIL faces difficulties during the talks with the Iraqi Government over the West Kurna-2 project, Vagit Alekperov, President of the Russian company, said in Baku on 2 July. He did not clarify the kind of difficulties.

"Still the consultations with the Iraqi Government are underway. We have difficulties in the negotiations," Alekperov said.

However, the company hopes that upon approval of the law on Law in Iraq the talks will be continued. In autumn Alakperov plans to pay a next visit to Iraq.

"I am sure that doors for this project are not closed for us. We are working and will accomplish the negotiation process," he said.

According to the LUKOIL President, the company's possible participation in other projects in Iraq will depend on talks on West Kurna -2 project with the Iraqi Government.

Contract on development of and production of the second oil field West Kurna-2 was signed on 21 March 1997. LUKOIL's share comprises 68%. An agreement on strategic partnership between LUKOIL and ConocoPhillips envisages transition of 17.5% to the US company in the contract. The field is considered as the biggest one in the world with the estimated reserves of 6bln barrels of oil.

In 2002 the Iraqi side stated that the agreement on the field was cancelled due to LUKOIL's failure to fulfill the terms of the contracts. The implementation of the contract was ceased until its coordination with new government of the country. LUKOIL plans to give its 17.5% share to ConocoPhillips, which will enable to increase the probability of sanctioning the project.