Russian energy company drilling scores of oil wells in Iraq

Dec 02, 1999 01:00 AM

Despite UN sanctions restricting Iraqi oil sales, a Russian energy company said that it was drilling scores of oil wells in Iraq. Vladimir Kalinitchev, an executive director of Zarubezhneft, said his company's drilling, did not violate UN sanctions imposed after Iraqi forces invaded Kuwait in 1990.
But the drilling operation was likely to be raised at the UN committee that monitors sanctions against Iraq. The drilling, which is concentrated in the Kirkuk field in north Iraq, is the first by a foreign company since sanctions were imposed.
"We are the fist to sign service contracts for the drilling of wells in Iraq" since the 1991 Gulf War, Kalinitchev told. He stressed that Zarubezhneft's activities conformed to exemptions from the sanctions allowing Iraq to expand its oil output and export capacity to earn more revenue to feed its people. The exemptions are part of the UN oil-for-food program under which Iraq is permitted to sell limited quantities of oil with the condition that the proceeds must be spent on food and humanitarian goods.
Iraqi Oil Minister Amer Mohammed Rashid said several Russian companies were engaged in $ 400 mm worth of contracts to boost Iraq's oil output and revamp its oil industry. Zarubezhneft is the only Russian firm engaged in drilling; the others are working on the rehabilitation of oil infrastructure.
Kalinitchev said Russian engineers and their Iraqi colleagues were drilling 45 wells in Kirkuk to boost the production of the field to 1.1 mm bpd from the current 900,000 bpd. Zarubezhneft also has a contract with Iraq Drilling Company to drill an expected 100 wells in the North Rumeila field in south Iraq.
Iraq favours Russian firms over those of other countries because of Moscow's political and diplomatic support. Russia is also a major importer of Iraqi crude.

Source: AP
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