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Sun 6 Sep 2009 08:45 PM

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LUKOIL to keep investment plan intact - president

Russian private oil producer may expand plans if it wins tenders in Iraq, says president.

LUKOIL, Russia's biggest private oil producer, will keep its original investment plans for the next two or three years and could expand them if it wins tenders in Iraq, the company's president said.Last year, LUKOIL said it could halve its original $8 billion 2009 investment programme if oil prices fell to $45 per barrel. They now stand at around $70 per barrel.

Speaking to reporters on Saturday, Vagit Alekperov described the current price of around $68 per barrel as "comfortable" for LUKOIL and said it allowed the company to go ahead with investment.

"We would want to keep the level of $8 billion in the next two or three years," Alekperov said.

Alekperov said investments could grow if LUKOIL won oil tenders in Iraq, which is now offering foreign companies access to its oil wealth in exchange for investment.

The first tender held by Iraq, ended in the signing of only one contract, with BP.

"The conditions of the first round were not economically attractive and did not take into account risks," he said.

However, Alekperov said LUKOIL would continue to participate in the Iraqi tenders, hoping to return to Western Kurna-2 - the world's biggest oil deposit, with 6 billion barrels of reserves.

LUKOIL won rights to explore Western Kurna-2 under former Iraqi leader Saddam Hussein and Russian media said the company had invested around $4 billion in the project. However, not long before its collapse, Saddam's government revoked the licence.

Alekperov said he would visit Iraq in late October.

He also said that LUKOIL hoped Kazakhstan would agree this week to its plan to buy BP's share of their joint venture, which has a minority stake in the Caspian Pipeline Consortium. (Reuters)

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