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Russia salvages $3.2 billion Iraqi oil deal

SPECIAL TO WORLD TRIBUNE.COM
Monday, January 20, 2003

MOSCOW Russia appears to have rescued a $3.2 billion oil exploration and development contract in Iraq.

Officials said Baghdad's cancellation of the contract had come amid reports that Russia was withdrawing its support for the Saddam regime.

Russian officials said the Moscow-based LUKoil obtained a commitment from the regime of Iraqi President Saddam Hussein that the Russian company could continue development of Iraq's huge West Qurna-2 oil reserves.

Baghdad had cancelled the contract last month amid accusations that LUKoil had delayed the project, Middle East Newsline reported.

The Iraqi agreement to restore the LUKoil project came in weekend meetings in Baghdad. Officials said both Iraq and LUKoil decided to withdraw their complaints that the contract had been breached. The company was granted a 68.5 percent stake in the oil field, estimated to contain 20 billion barrels of crude oil.

The company plans to meet Iraqi officials next month to discuss development of West Qurna-2.

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