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Oil, Access Top Russia's Agenda for Iraqi Talks

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Corrado Bruno

Iraqi Prime Minister Iyad Allawi arrived in Moscow on Monday evening to hold high-level talks on rebuilding his war-torn country's infrastructure and developing its vast oil and gas resources.

Accompanied by key officials from the Iraqi interim government, Allawi is scheduled to meet Industry and Energy Minister Viktor Khristenko on Tuesday afternoon. Allawi will also hold talks with Prime Minister Mikhail Fradkov and business leaders, RIA-Novosti reported.

"The Russian side wants Iraq's government to honor contracts signed by Russian companies with Iraq's leadership before the war," a Russian government source familiar with Allawi's agenda said Monday.

Other topics for discussion earmarked by Moscow include the participation of domestic firms in the construction of oil and gas pipelines, cooperation in electricity production and equal access for Russian companies in doing business in Iraq.

Moscow, once a key partner of Baghdad, was pushed aside last year when Washington barred Russia and other nations that failed to support the U.S.-led invasion from bidding for billions of dollars worth of contracts to restore the country's economy.

Furthermore, Russian companies that had established business ties with Saddam Hussein's regime before the war were left in limbo on whether long-term contracts would be honored.

One such suspended contract is LUKoil's project to develop the West Qurna-2 oil field, which is believed to contain 7.3 billion barrels of recoverable reserves.

A number of smaller Russian companies have also been working in Iraq on maintaining energy sector infrastructure.

"Russia and Iraq are interested in protecting and further developing the traditional friendly ties and mutually beneficial cooperation that have long been connecting the two nations," Russian Foreign Ministry spokesman Alexander Yakovenko said in a statement Monday.

"Both sides are discussing the issues of increasing Russian participation in the post-crisis restoration of Iraq," Yakovenko said, adding that the talks will include projects launched under Hussein.

In an apparent attempt to win support within Iraq's interim cabinet, Russia last month agreed to join a pact to forgive up to 80 percent of Iraq's foreign debt, about $33 billion. Russia will write off about 90 percent of Iraq's $10.5 billion debt to Moscow by 2008, Finance Minister Alexei Kudrin said last week.