The vice-president of Russia's oil firm OAO Lukoil (LKOH.RS) Andrey Kuzyaev met Iraqi President Jalal Talabani in Baghdad Wednesday for talks on reviving a deal to develop the West Qurna-2 oil field, one of Iraq's largest, according to a report posted on the president's Web site Thursday.
Lukoil struck a $3.7 billion deal with then Iraqi president Saddam Hussein in 1997 to drill at West Qurna-2, which is among the most promising in Iraq with an estimated reserve capacity of over 6 billion barrels of oil. Hussein severed the contract in 2002, however.
Kuzyaev discussed with Talabani "the Russian oil company's participation in Iraq's oil investment and the need for removing the obstacles which hinder its participation," the statement said.
"Talabani expressed Iraq's willingness to reinforce bilateral relations with Russia in all fields particularly the oil sector," it said.
This is the second time a Lukoil executive has met with senior Iraqi officials in two months. In March Lukoil Chief Executive Vagit Alekperov met with Talabani and Iraqi Oil Minister Hussein al-Shahristani.
In February, Russia agreed to write off $12 billion, or 93%, of Iraq's $12.9 billion debts to Moscow, a gesture that appeared aimed at helping Russian companies win contracts in Iraq. The two sides also signed a separate deal opening up Iraq for $4 billion in investment from Russian firms, including Lukoil.
Lukoil said it had carried out a number of studies on West Qurna-2 that included processing of seismic data, evaluation of oil and gas potential of reservoirs, and elaboration of field development plans.
Russia's biggest oil company by production said the field can produce up to 600,000 barrels a day within a few years from its launch.
Iraq, which sets on the world's third largest oil reserves that estimated at 115 billion barrels of proven oil, is currently producing around 2.4 million barrels a day.
U.S. oil major ConocoPhillips (COP) became a strategic partner in Lukoil in 2004, taking a 20% stake and agreeing to work in Iraq in a move boosting market sentiment about the prospects of the deal revival.
Global oil majors have been maneuvering to win a stake in the world's third largest reserves in Iraq despite huge damage to the country's infrastructure caused by decades of wars and sanctions.
BP PLC (BP) and Exxon Mobil Corp. (XOM) have submitted proposals to the Iraqi Oil Ministry on technical services contracts to boost production at Iraq's oil fields. At least three more oil majors are also expected to submit their plans to Iraq to develop to other oil fields.