"Pertaining to the contracts signed during the bygone era, especially under the economic embargo, we clearly stated that these contracts will be reconsidered based on three essential tenets: their legality, competitiveness and where is the interest of the Iraqi people," Mr. Bahr al-Uloum was quoted as saying by Reuters. The minister said he had been invited by his Russian counterpart Igor Yusufov to visit Moscow, but he said no date had been set for the visit.

The contract for the development of West Qurna-2 was signed in March 1997 and approved by the Iraqi Oil Ministry. A consortium of Russian companies, including LUKoil (68.5 percent), Zarubezhneft and Mashinimport (3.25 percent each), was expected to develop the field and use the extracted oil on production sharing terms, up to 2020.

However, Iraq announced the rescission of the agreement at the end of last year, on the grounds that the company did not implement the contract. For its part, LUKoil insisted that the contract was valid. According to LUKoil officials, UN sanctions against Iraq did not allow the company to implement the agreement, but LUKoil considers this contract as valid.

After the war in Iraq, a member of the US administration said LUKoil had lost the West Qurna contract. However, this statement was later refuted, and the issue was postponed until after an internationally recognized, legitimate government is installed in Iraq.

Meanwhile, LUKoil officials said on June 1 that the company should start implementing the contract within 100 days after the lifting of the UN sanctions. The sanctions were lifted on May 22, and the 100-day period expired back in August.

About a month ago, reports appeared about a possible alliance between LUKoil, the US oil company Fluor and Britain’s Amec PLC. These companies obtained several small oil contracts in Iraq from the US administration, while all large contracts were given to Halliburton and Bechtel Group. The alliance wants to get a contract for the restoration of oilfields in northern and southern Iraq. If these hopes come true, Fluor and Amec will become large oil supplies in Iraq. Their alliance with LUKoil could significantly increase their share in Iraq.

West Qurna-2 has proven reserves of about 6bn barrels of oil. Investments in the oilfield could amount to $4bn.