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Middle East

Moscow, Baghdad seek to restore pre-war energy deals

Latest update : 2009-04-11

Russia and Iraq have agreed to work on restoring energy contracts worth $3.7 billion, signed before the Iraq invasion in 2003. The agreement comes after Russian PM Dmitry Medvedev met his Iraqi counterpart Nuri al-Maliki in Moscow.

AFP - Iraq and Russia's leaders on Friday sought to revive political and economic ties disrupted by the US invasion six years ago and to position Moscow for future energy deals in the country.

Iraqi Prime Minister Nuri al-Maliki said Russia should regain its pre-invasion role in developing his country's vast energy resources.

"We're sure Russian companies should be an important partner at the current stage," he told Prime Minister Vladimir Putin.

"We have achieved a lot of success in creating a national unity government. Now we are ready to develop relations with Russia," Al-Maliki said at a later meeting with President Dmitry Medvedev.

Putin, who as Russia's president was one of the fiercest critics of the 2003 invasion of Iraq, struck a notably warm tone towards the US-backed Iraqi premier making his first visit to Russia since taking office.

The Russian premier praised Iraqi democracy and recent elections, going on to stress Russian interest in oil and gas fields, where Moscow concluded major contracts in the era of Saddam Hussein.

Russian companies, especially energy majors, are keen to share the benefits of rebuilding energy-rich Iraq that have been enjoyed by Western firms whose governments supported the 2003 invasion.

"Despite all the difficulties of the situation we see positive tendencies," Putin told reporters.

"We take the view that the situation is becoming more and more sustainable. This concerns security and the domestic political situation."

And he added: "Concerning Russian business and investment connections, naturally the emphasis (in talks) was put above all on cooperation in the oil and gas sphere."

In the electricity sphere "a great deal of positive experience was accumulated in earlier years," he said.

Putin also noted Iraqi interest in acquiring Russian weapons, although he did not elaborate.

Russian Energy Minister Sergei Shmatko said Iraq was looking to restore Saddam-era contracts with Russian energy companies.

He stopped short of announcing any breakthrough on a particularly vexed issue, a contract with Russian company Lukoil to develop the rich West Qurna oil field in southern Iraq, which Saddam broke off in 2002.

Lukoil in 1997 signed a 3.4 billion dollar contract to explore the West Qurna 2 oilfield. But even before the US-led invasion, the Russian company was expelled because of disagreements with the Saddam Hussein regime.

"We agreed in principle to establish the task of restoring contracts concluded in the pre-war period between Russian and Iraqi companies," Shmatko said.

"I consider this to be very big progress," Shmatko said, stressing the links between Iraq's Saddam-era energy system and that of the Soviet Union, where many Iraqi specialists received training.

In awarding future contracts, the visiting Iraqis had promised not to give special preferences to other countries, said Shmatko, clearly referring to US and Western oil firms.

"We received clear assurances from the Iraqi leadership that preference won't be given to other countries' companies," said Shmatko.

Russia had received "many tempting proposals" for participating in restoring Iraq's power system, he added.

Russia and Iraq signed a 133-million-dollar deal which would have Moscow restore the second and third energy blocs of Iraq's Kharta power station, ministry officials said late Friday, the RIA Novosti news agency reported.

The project, funded by the World Bank, is due to be completed within 30 months.

Maliki is the second Iraqi premier to visit Russia since 2003. Iyad Allawi travelled to Moscow in December 2004.

The Kommersant daily said he would also seek the support of Russia, a permanent UN Security Council member, for the elimination of remaining UN sanctions against Baghdad.

Date created : 2009-04-11