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Sat 21 Feb 2009 11:50 PM

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Iraq to speed up oil projects with Syria

Baghdad plans speed up of multibillion dollar energy projects with Damascus in bid to ease political ensions. 

The Iraqi government plans to speed up multibillion dollar energy projects with Syria that would help end tension between the two neighbours, Iraq's first ambassador to Syria in almost 30 years said on Friday.The projects - an oil pipeline linking the Kirkuk oilfield to a Mediterranean terminal and the development of an Iraqi gas field near Syria - have been delayed, with Baghdad criticising Damascus for what it describes as insufficient cooperation on stopping rebel infiltration across the 600 km (375-mile) border.

"I expect substantial progress. What I heard directly from the leadership of my country is that Iraq is serious and ready to remove the obstacles standing in the way of these two strategic projects," Ala al-Jawadi told Reuters.

Jawadi, a founder of the Shi'ite Supreme Council For the Islamic Revolution in Iraq, lived in Syria along with scores of exiled Iraqi opposition leaders during Saddam Hussein's rule.

"I will not say more because these issues are better resolved away from the spotlight, but we will see major progress," said Jawadi, who presented his credentials to President Bashar al-Assad this week.

Relations between Iraq and Syria plummeted after Saddam Hussein became president of Iraq in the late 1970s and Iraq launched an eight year war against Iran.

The two countries remained on poor terms after the U.S. invasion of Iraq removed Saddam from power in 2003, although the two sides re-opened embassies in each other's capitals three years ago.

Syria was a major exporter to Iraq in the last years of Saddam Hussein's rule. It also helped Iraq bust United Nations sanctions by importing crude oil through the pipeline, which was bombed by U.S. planes during the 2003 invasion.

Syria, whose oil output fell steadily to 379,000 barrels a day last year, has felt limited economic benefit since the invasion of Iraq and an end to sanctions which contributed to the collapse of the Iraqi economy but helped neighbours thrive.

Damascus views joint energy projects as crucial - the oil pipeline would net Syria hard currency that would help offset its declining oil production - but Iraq has made it clear that they must be accompanied by progress on the security issue.

Iraq invited Russia's Stroytransgaz in 2007 to submit an offer to re-activate the 300,000 barrel per day Kirkuk-Banias oil export pipeline and raise its capacity but no follow-up was made, industry executives said.

Initial agreements also envisaged developing Iraq's Akkas gas field and exporting output through an Arab network passing through Syria. Iraqi officials who visited Damascus last year urged Syrian officials to do more on security cooperation for the projects to move forward.

Akkas is one of eight oil and gas fields that Iraq opened to foreign firms to bid for last year. The Iraqi oil ministry said in January it was "preparing the requirements" for a gas pipeline from Akkas to Syria.

Jawadi would not be drawn on the security issue, but said Iraq was looking to improve ties with Syria across the board.

"The intention is now sincere from the two countries to move relations where they should be. Economics ties are related to the overall political, social and security picture," he said.

"We are not taking about a country thousands of kilometres from Iraq. We are talking about a neighbouring country where many of Iraq's current leaders used to live and many Iraqis (refugees) still live under generous benefits."  (Reuters)

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