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. Last Updated: 07/27/2016

Iraqi Oil Ministry Says No Contracts Canceled

BAGHDAD, Iraq -- Iraq said Wednesday that it had not cancelled oil contracts with Russian companies to develop oil fields after the downfall of Saddam Hussein's government.

"So far the Oil Ministry has not cancelled any contract with any country, or with international oil companies," an Iraqi Oil Ministry source said.

The source, however, said LUKoil's contract to develop the giant West Qurna oil field had been cancelled by the former government.

The $3.7 billion contract was held by LUKoil until mid-December, when Baghdad pulled the plug, saying the company had failed to meet the terms of the deal by not starting development work.

LUKoil, however, insists its contract is still valid and plans to begin work on the field "soon."

"We are in consultations with the occupying power. The sanctions have been lifted; we will invest soon in Iraq," LUKoil vice president Leonid Fedun told The Moscow Times on Monday. He said LUKoil was now in "constant contact" with the U.S. administration in an attempt to find a way to hold on to the field and that the company was waiting on a progress report from Foreign Minister Igor Ivanov, who had been negotiating with U.S. officials on behalf of LUKoil at the recent summits in St. Petersburg and Evian, France.

Ivanov told reporters in Spain on Wednesday that he had received "firm assurances" from the U.S. administration that there will be "no discrimination against Russian companies in Iraq," news agencies reported.

Russian companies will take part in tenders for various economic projects in Iraq on the same conditions as Western firms, Ivanov was quoted by RIA Novosti as saying on the sidelines of a Russia-NATO meeting.

The source in the Iraqi Oil Ministry said his ministry had not signed any new contract since the collapse of the former government "except those signed with Turkey and Jordan to sell them fuel oil in return for gasoline."

In January, Iraq awarded a contract to Russia's Stroitransgaz, an oil and gas construction company, to develop block four in Iraq's Western Desert. It also initiated contracts with Soyuzneftegaz for the 200,000 barrels-per-day Rafidain field in southern Iraq and with Tatneft for block nine in the Western Desert.

Iraq started negotiations with Zarubezhneft, Russia's umbrella company for state holdings abroad, on the giant Bin Umar field, with estimated production of 450,000 bpd.

(Reuters, MT)