Baghdad snubs Russian oil contract (fwd)

["Clement M. Henry" <chenry@mail.la.utexas.edu>]

This might have been interesting had it happened earlier, during our sim
game!

*****************************
Clement M. Henry
Professor of Government
University of Texas at Austin
Austin TX 78712
tel 471-5121, fax 471-1061

---------- Forwarded message ----------
Date: Fri, 13 Dec 2002 11:48:55 -0500
From: Murray Kahl <kahl1@gate.net>
Reply-To: eretz-yisrael@shamash.org
To: Middle East discussion group & Zionist news releases
    <eretz-yisrael@shamash.org>
Subject: Baghdad snubs Russian oil contract


Israeli & Global News

First Published 2002-12-13, Last Updated 2002-12-13 13:28:57
Baghdad snubs Russian oil contract
MiddleEast On-Line

Iraq breaks multi-billion-dollar contract with three Russian oil firms
including LUKoil, political motive claimed.

MOSCOW - Iraq has pulled out of a massive contract with three Russian
companies to drill in one of its oilfields, in a snub being seen as aimed
at putting political pressure on Moscow, the giant LUKoil company said
Thursday.

LUKoil said Baghdad had broken a multi-billion-dollar contract signed by it
and two other firms to drill in the West-Kurna-2 field, in the south of the
country, Interfax news agency said.

In addition to LUKoil, the other firms affected are Zarubejneft and
Machinoimport.

LUKoil spokesman Alexander Vassilenko described the move, which he said was
notified in a letter signed by Iraq's deputy energy minister, as "petty
blackmail."

Russian experts said the cancellation was aimed at pressuring Russia -
which has long had major interests in Iraq - into standing up to the United
States by opposing its plans for a war against Iraq.

The decision is a major blow to Russian oil firms, which have always been
favored by Iraq over Western companies in exploration and drilling operations.

LUKoil head Vaguit Alekperov, whose company is the world's third-largest
oil group in terms of reserves, appealed to Russian authorities to contest
the Iraqi move with officials in Baghdad.

"We have not failed to meet the contract terms and we are going to assert
our rights in conformity with international law," added Vassilenko.

"It appears that we are under the protection of the Russian state and that
the appropriate bodies will do everything to confront this unjust move."

The West Kurna field is estimated to contain reserves of some 7.3 billion
barrels of crude oil.

Iraq is the country with the second largest known oil reserves in the world
after Saudi Arabia.

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