Russia Will Train Iraqi Oil Workers With Eye on Future Deals

Russia Will Train Iraqi Oil Workers With Eye on Future Deals

Moscow ( - Russia has begun providing assistance to Iraq's oil sector, hoping to revive its once-strong position there, even as the shadow of the oil-for-food program scandal continues to hang over the industry.

A first group of Iraqi oil specialists has arrived in Western Siberia for training at facilities run by Russia's top oil company, LUKoil.

The company said Tuesday it planned to train 100 Iraqi oil workers this year, and another 150 each year between 2005 and 2009. It also plans to provide $5-million dollars worth of humanitarian supplies in 2004-5 to assist the recovery of Iraq's oil sector.

In a statement, the oil giant's president, Vagit Alekperov, said the arrival of the first group was an important step in dialogue with Iraq and a "good start" for future Russian oil projects in Iraq.

Russia, which opposed the war to overthrow Saddam Hussein and has refused to send peacekeepers to help rebuild and secure Iraq, hopes to secure its decades' old oil investments in the country under the new government.

In 1997, Hussein signed a 23-year, multi-billion-dollar contract with a LUKoil-led consortium to develop the West Qurna-2 oil fields, but canceled the deal in February 2003, just before the war.

LUKoil insists that the mega-deal remains valid and hopes to be pumping crude in the country as early as next year.

It signed a memorandum of understanding signed with the Iraqi Oil Ministry earlier this year dealing with rebuilding the industry and training Iraqi workers. At the same time, an "understanding" was reportedly reached over the West Qurna issue.

During a visit to Moscow this week, Iraqi Foreign Minister Hoshyar Zebari said Baghdad would "carefully assess all of our previous agreements with Russian companies" but also said there was "a strong chance" Russia would keep or secure new oil contracts.

The two governments are to appoint representatives to check into all Russian contracts agreed under the previous regime, including those within the framework of the United Nations' oil-for-food program, Zebari said.

The U.N. program is a sensitive issue in Russia because of allegations that Russian entities illegally benefited from a project that was designed to help ordinary Iraqis at a time the regime was targeted by international sanctions.

Earlier this year, Iraqi media alleged that some 40 Russian companies and individuals, including entities linked to the Russian Orthodox Church, the Communist Party and the far-right Liberal Democratic Party, took part in an illegal kickback scheme.

Russian officials and oil companies have denied the claims, which are the subject of a probe approved by U.N. Secretary-General Kofi Annan.

Russia was Iraq's largest supplier under the program. Of the $18.3 billion in oil-for-food contracts approved by the Security Council, some $4.2 billion went to Russia. Eleven Russian oil companies bought tens of million of barrels of oil from Iraq under the deal.

Earlier this month, the Iraqi official heading the investigation into the scandal, Ihsan Karim, was killed in a bomb attack.

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