#6 - JRL 7135
LUKOIL to challenge Iraq oilfield contenders-paper
MOSCOW, April 8 (Reuters) - Russia's top oil firm LUKOIL <LKOH.RTS> said on Tuesday it would block Iraq's huge West Qurna oilfield development for many years if any U.S. or British firm decided to challenge its leading role in the project.
LUKOIL Vice President Leonid Fedun told Kommersant business daily the firm would sue any new contender for the field for at least $20 billion and ask international courts to arrest tankers with Iraqi crude oil.
"Nobody can develop this field without us in the next eight years. If somebody decides to squeeze LUKOIL out, we are going to appeal in the Geneva arbitration court, which will immediately arrest this field," said Fedun.
"This type of trials can last for about six or eight years...We are going to arrest tankers with crude produced in Iraq using the Geneva court," he added.
Oil analysts have said that ChevronTexaco <CVX.N>, ExxonMobil <XOM.N> and ConocoPhillips <COP.N> of the United States are likely to compete with Anglo-Dutch Shell Group <RD.AS><SHEL.L>, Britain's BP <BP.L> and TotalFinaElf <TOTF.PA> of France for major production contracts should post-war Iraq privatise its oil industry.
Russian firms have the most to lose in a post-war Iraq as they have signed contracts worth $4 billion with the government of Iraqi leader Saddam Hussein to drill oil wells, deliver equipment and develop Iraq's massive oil reserves, which rank second in the world after those of Saudi Arabia.
The key deal is a $3.7 billion contract held for years by LUKOIL and smaller Zarubezhneft and Mashinnoimport to develop West Qurna.
Iraq scrapped the deal in 2002 saying LUKOIL sought U.S. guarantees to keep the field under any government change, while LUKOIL said the move was aimed at punishing Russia's diplomacy for its moderate position in the U.N. Security Council.
Fedun said LUKOIL still believed the field belonged to his firm: "From the legal point of view, it is still our field."
Fedun also said he did not expect Iraq's oil output to skyrocket under a new government but to stay at around 2.7-3.5 million barrels per day.
"A huge output hike in Iraq within the next few years is simply impossible from the technical point of view. Out of all big Iraqi fields only West Qurna is ready to be launched shortly," he said.
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