LUKOIL & Conoco Philips set to exploit Iraq oilfields

Exploitation of Iraqi oil fields has taken 3 years since the invasion. Now after much backstage wrangling the players (No 1 Vagit Alekperov see pic )are making their moves with the new Shia dominated Gubment. The Russian energy companyLUKOIL, the 20th biggest oil company in the world, has Mr Meyer of Conoco Philips on the board, they also never closed their office in Baghdad. LUKOIL is planning to start joint exploration of the West Qurna-2 oil deposit in Iraq with U.S. company ConocoPhillips (they have a 17.7% stake), LUKOIL President Vagit Alekperov announced Tuesday. CP took a stake in LUKOIL last September which they want to raise to 20%.

This deposit has estimated recoverable resources (according to Cambridge Energy Research Associates) at 11.3 billion barrels and is third biggest in Iraq.

"All conditions have currently been met in Iraq that are needed to start project implementation," Alekperov said. "In the near future, LUKOIL Overseas head Andrei Kuzyaev will fly to Baghdad and at the end of the year I might go there as well."

Alekperov is certain the Iraqi side sees the project's validity and assumes that Baghdad will not demand the revision of existing agreements.

Alekperov told journalists that the American company would participate in the exploration of the Iraqi deposit.

LUKOIL also plans to join efforts with ConocoPhillips on the U.S. market. After a visit last week by Vagit Alekperov to meet President Chavez LUKOIL will conduct exploration of Venezuelan oil deposits and produce oil that will be supplied later to U.S. refineries that belong to ConocoPhillips. The resulting oil derivatives will be sold at the more than 2,000 (ex Getty Oil) U.S.-based gas stations that belong to LUKOIL.

LUKOIL will also reduce oil supplies in the East. According to Alekperov, if the company had planned to supply three million tons of oil to China this year, it now is assuming the supply volume will not exceed two million tons this will free rail space for state-owned Rosneft, Interfax reports. Rosneft will supply China with 10 million tons of oil this year via national rail monopoly Russian Railways.

Lukoil produced 81.5 million tons of oil and 5.5 billion cubic meters of gas in 2003. According to Energy Intelligence Group. Their reserves are said to exceed those of Exxon. Vagit Yusopovitch Alekperov was born in Baku, Azerbaijan in 1950. His nicknames, "the General," "Alek the First" and "the Don," are indicative of his indisputable authority at LUKoil, whose name came from the first letters of the three companies that consolidated-- Langepas, Urai and Kogalym. Today LUKoil is among the world's most powerful oil companies,

In March 2004 , LUKOIL's chief executive Vagit Alekperov met Iraq's Oil Minister Ibrahim Bahr al-Ulum who has said that oil companies of different countries should do business in Iraq. According to him, talks with LUKOILl were held in December 2003. During their March 11th meeting in Baghdad, they signed a deal to train Iraqi oil industry employees and students. 40 Iraqi students will study in Russia's I.M. Gubkin Oil and Gas University. Their numbers were due to increase to 100 students in 2005.

Mr. Alekperov has moved into banking and the media. He and Lukoil control the Imperial Bank, several television stations and the newspaper Izvestiya.

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Oil is not well in Iraq Edward Teague