The sanctions committee of the UN has approved a contract for Russia's fourth largest oil producer to drill 33 oil wells in Iraq. The Tatneft oil company cautioned, however, that the contract, signed in March 2000 with the Iraqi state-owned North Oil Company, will become effective only when the UN opens a documentary credit with a western bank. The contract must be implemented within one year from the opening of the credit.

Tatneft is also preparing to participate with another Russian company, Zarubezhneft, in a similar project announced in February 2001 under the UN's oil-for-food programme to drill 45 wells in Iraq. Tatneft began training specialists in February this year to be sent to Iraq to drill under this contract.

Zarubezhneft is a major Russian player for work in the oil-for-food programme in which Tatneft is now an established supplier of technology and equipment to Iraq. The Iraqi Oil Industry Ministry is reportedly considering several proposals from Tatneft for exploration and oil field development projects in Iraq.