Stop Sulking!

It looks as though at least one Russian company has been forced to adopt a stance of economic reality over political posturing.

Russian producer Lukoil has said it is sending $5 million worth of aid to Iraq’s Oil Ministry this year, as the Iraqi government warned Russia to change its policies or be frozen out of new exploration deals.

The Moscow-based company’s units will spend the $5 million to supply excavators, Mercedes ambulances, carrier trucks and other equipment to Iraq under a contract signed in March 2004, Lukoil said.

Lukoil is seeking to regain rights to the 15 billion-barrel West Qurna oil field in southern Iraq. Saddam Hussein’s regime revoked Lukoil’s contract shortly before the US-led invasion in 2003 because Lukoil had delayed development.

If this goes ahead, I think it will be the first entry of a Russian oil company into Iraq since the removal of Saddam Hussein. But they key to what is driving this is contained in the 7th and 8th paragraphs:

Lukoil has said it will invite ConocoPhillips to join the West Qurna project. ConocoPhillips has an 11.3% stake in Lukoil, a holding it plans to boost to 20%.

It is likely that ConocoPhillips were the ones pushing for this entry into Iraq. If not, they will certainly have a major role to play in any developments there.

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