Russia: Debt not tied to move for Iraq oil

Aug. 7, 2007 at 5:34 PM

MOSCOW, Aug. 7 (UPI) -- A top Russian finance official said Iraq’s debt could be settled after a visit this week by Iraq’s oil minister, though a swap for oil fields isn’t needed.

Russian Deputy Finance Minister Sergei Storchak said Iraq’s $10 billion debt to the former Soviet Union, racked up mostly from military sales to Saddam Hussein, “will depend on a visit by the Iraqi oil minister.”

He said “there is cautious optimism” on settling the debt issue, RIA Novosti reports.

Although the ministry says it isn’t a quid pro quo for access to Iraq’s vast oil reserves, an oil deal signed during Hussein’s regime will certainly be a main discussion point.

Iraqi Oil Minister Hussain al-Shahristani was invited by Viktor Khristenko, Russia's energy minister.

Kommersant reports representatives from Lukoil, Russia's leading private oil company, Rosneft, the largest state-owned oil firm, and two state-owned foreign assets firms, Zarubezhneft and Neftegazexport, will also be at the talks.

Lukoil had a deal for the lucrative West Qurna 2 field, but it was since overturned. Lukoil and Rosneft are angling for the deal again. The deal was canceled by Baghdad in 2002, though Russia maintains it should still stand.

Any deals would all have to be tailored to comply with a federal oil law, which has yet to be approved by the Parliament.

Itar-Tass reports a Russian government source said reviving the deal will be a major topic of discussion.

"In the course of the upcoming negotiations, the parties intend to discuss prospects for resuming cooperation in the energy sphere, in particular the mechanisms to revive the contract to develop the Western Qurna field in Iraq," the source said.

West Qurna has an estimated 6 billion barrels of proven oil reserves.

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