For the first time in 37 years Iraq is inviting foreign companies to develop its oil assets. Among them is the West Qurna field, where Russia's Lukoil is bidding.

West Qurna 1 is one of the biggest oil fields in Iraq. The tender proposes the developer should produce 1 million barrels of oil from West Qurna 1 daily. And will get $1.90 for every barrel it produces on top of that.

That didn't appeal to the oil companies. Five of them pulled out from the tender, saying that amount was too low. Russia's Lukoil wants $4 per each additional barrel produced, but has not lost hope yet.

Russia has been involved in the region for a long time. In 1997 Lukoil obtained the right to develop West Qurna 2 in Iraq which in fact is even bigger than West Qurna 1, with around six billion barrels of oil. However drilling never began – first due to UN sanctions and later because all agreements made under Saddam Hussein’s regime were cancelled under the new administration. Russian companies have been working to get back into Iraq since then.

Experts say the fact Russia signed a contract with Saddam in the first place might not be welcomed by the new administration. But Ronald Smith, Chief Strategist at Alfa Bank, says its experience there could also be an advantage.

”It might be a plus because Lukoil has been working with that country for a while and knows a lot of the people who help determine things in the oil industry. They brought a number of Iraqi engineers to West Siberia for training over the years. So they’ve worked to deepen their contacts.”

Whether Lukoil wins the tender for West Qurna 1 or not, it will be keen to get involved in developing the neighboring field, West Qurna 2, which contains more than twice as much untapped oil.