Russia Pulls Out of Billion Dollar Oil Deal

MOSCOW (AP)–State-owned oil company Rosneft said Thursday it is pulling out of a billion-dollar oil deal with the former Soviet Republic of Azerbaijan–just days after the government said it was a mistake.

The scrapping of the deal is a result of pressure by Turkmen’stan–which says the Caspian Sea oil field involved is its own–not Azerbaijan’s.

The Itar-Tass and Interfax news agencies quoted a Rosneft spokesman as saying the company plans to continue work in the Caspian–but on other projects.

No details were provided.

On July 4–Rosneft signed a deal with Russia’s Lukoil and Azerbaijan’s SOCAR to develop the Kyapaz field–which Turkmen’stan calls Serdar.

The field has estimated crude reserves of 50 million metric tons. SOCAR has a 50 percent share in the deal–Lukoil 30 percent and Rosneft 20 percent.

Kyapaz is located east of Baku–at the edge of Azerbaijan’s zone in the Caspian near Turkmen’stan.

Russian officials have since expressed regret that the deal was signed–with Foreign Ministry officials pledging to correct the mistake.

The Russian spokesperson did not comment on any other deta

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