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Russia's Lukoil-Led Group Signs Oil Deal with Iraq

Tue, 07/17/2012 - 6:00am
the Associated Press

BAGHDAD (AP) — A consortium led by Russia's private oil giant Lukoil has signed a preliminary deal with Iraq to explore for oil in the south, boosting the company's portfolio in the war-torn country.

In May, OAO Lukoil and its partner, Japan's Inpex, won the exploration rights in the 5,500-square-kilometer (213-square-mile) Block 10, shared by southern provinces of Muthan and Thi Qar, in the fourth energy bidding round. They will be paid $5.99 for each barrel of oil equivalent.

The contract was signed Tuesday at the Oil Ministry in Baghdad. It still needs final approval from the Cabinet.

Lukoil is developing the 12.88 billion barrels West Qurna Phase 2 in southern Iraq. Iraq seeks foreign investment to develop vast natural resources after decades of war, U.N. sanctions and neglect.

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