Oil report

Russian firm signs deal to fix Iraq-Syria pipeline

MOSCOW, March 26 (Reuters) - Russian firm Stroytransgaz has signed a protocol with Iraq to reactivate an oil export pipeline to Syria’s Mediterranean terminal of Banias, the Russian firm said on Wednesday.

It said it had signed the deal in Amman, Jordan, with Iraqi North Oil Company.

“The participation of Stroytransgaz in this project will represent a substantial contribution by Russian firms to reconstruction and modernisation of Iraqi economic infrastructure,” the statement said.

Last week, Russian President Vladimir Putin wrote a letter to Iraqi Prime Minister Nuri al-Maliki calling on him to support Russian investments in the country.

The letter was sent as a delegation of Russian businessmen was visiting Baghdad.

The delegation included the head of oil major LUKOIL LKOH.MM, which is trying to revive a $3.7 billion Saddam Hussein-era deal to develop the West Qurna oilfield, one of Iraq's largest.

Putin specifically mentioned in his letter a project to rebuild the Kirkuk-Banias pipeline and West Qurna. Iraq has repeatedly said the West Qurna deal had been cancelled and LUKOIL would have to compete with other firms at a new tender.

Syria has a 600-km (375 mile) border with Iraq. U.S. forces bombed the 300,000 barrel per day pipeline on the Iraqi side during the 2003 invasion that removed Saddam Hussein from power.

Resuming Iraqi oil exports through Banias would net Syria an estimated $1-$1.5 billion a year in transit fees. (Reporting by Dmitry Zhdannikov; editing by James Jukwey)