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    Russia could create consortium to facilitate energy deals in Iraq

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    Russian energy companies could create a consortium to resolve issues hampering their work in Iraq, the Russian energy minister said.

    MOSCOW, September 13 (RIA Novosti) - Russian energy companies could create a consortium to resolve issues hampering their work in Iraq, the Russian energy minister said.

    "I think our companies could create a consortium to facilitate the resolution of the existing problems there," Sergei Shmatko told participants of the Valdai Discussion Club discussions on Saturday, summarizing the results of his recent visit to Iraq.

    He added that the Russian delegation during his visit to Iraq included representatives of the oil companies Rosneft, LUKoil, and TNK-BP.

    LUKoil, Russia's largest independent crude producer, is seeking, in particular, to restore a 1997 contract for the development of the West Kurna-2 deposit in southern Iraq, which was frozen in 2002 after the fall of Saddam Hussein's regime.

    West Qurna-2's proven recoverable reserves have been estimated at around 6 billion barrels of oil. Under the terms of the contract, output could amount to 4.8 billion barrels of oil and 56.4 billion cubic meters of associated gas. Investment in the project could reach $4 billion.

    Shmatko said the main issues hampering the work of Russian firms in Iraq are poor security and inefficiency of financial mechanisms regulating the contractual obligations.

    At the same time, the minister reiterated that Iraq "is seeking the full return of the Russian companies on its market."

    Shmatko said the Russian companies had the best opportunities in Iraq in the development of power generation network because almost all the existing Iraqi infrastructure in this sphere was built by Russia in the Soviet era.

    Moscow and Baghdad have recently agreed on building two gas pipelines in Iraq and on cooperation in operating two Iraqi thermal power plants

    "We will soon develop a long-term program on cooperation in these projects...and sign the relevant documents," Shmatko said.

     

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