The National Joint-Stock Company "Naftogaz of Ukraine" refutes information about its alleged participation in schemes involving Iraqi oil and states that NAK purchases oil in Iraq within the framework of the UN "Oil for Food" program.

This is stated in a press release from NAK "Naftogaz of Ukraine" distributed on Friday.

"NAK 'Naftogaz of Ukraine' expresses concern over reports in the Iraqi media about the company's preferential purchase of 8 million barrels of Iraqi oil in Iraq during Saddam Hussein's rule," the document says.

The press release notes that the company has considered and continues to consider its participation in projects in Iraq's oil and gas sector "exclusively as commercial activity."

"During the period 2000-2002, three contracts for the purchase of oil were concluded between NAK 'Naftogaz of Ukraine' and the State Oil Marketing Organization (SOMO), including: contract No. M-08/188 dated October 9, 2000, which was not implemented, the oil under which was not shipped and payment for which was not made; contract No. M-10/41 dated August 7, 2001, for the purchase of 2 million barrels of oil; contract dated February 10, 2002 (without a number) for the purchase of 1.5 million barrels of oil," the NAK press service reports.

Thus, the press release states, "the company purchased 3.5 million barrels of oil, not 8 million as noted in Iraqi media publications."

"All contracts were concluded at the 'standard SOMO price agreed with the UN.' The purchase of oil was carried out within the framework of the United Nations 'Oil for Food' program and was duly approved by the UN Security Council Committee (Committee 661)," the press service notes.

The company states that NAK "Naftogaz of Ukraine" will continue to develop mutually beneficial cooperation with the Republic of Iraq, viewing it in terms of commercial activity.

On February 4, 2004, NAK "Naftogaz of Ukraine" plans to hold a presentation of the capabilities of the oil and gas complex for American experts and staff of the US Embassy in Ukraine, the company reported. US Ambassador to Ukraine John Herbst is expected to participate in the presentation. The purpose of the presentation is to promote the participation of Ukrainian enterprises in the reconstruction of Iraq.

During the presentation, American diplomats and experts will be presented with materials about the capabilities of the company's subsidiaries in oil and gas exploration and production, transportation and processing of energy resources. Enterprises from related industries will participate in the presentation — construction, pipe-rolling, and machine-building.

The company is convinced that the intensification of cooperation between Ukraine and Iraq in the energy sector will be mutually beneficial.

According to the press service, the chairman of the board of NAK "Naftogaz of Ukraine" Yuriy Boyko and the chairman of the board of PGNiG Marek Kossowski signed a memorandum on October 23, 2003, in Warsaw on the creation of a joint venture to work in Iraq.

On December 9, 2003, deputy chairman of the board of "Naftogaz" Kostiantyn Frolov made a working trip to Warsaw, during which he handed over to the vice-president of PGNiG the draft constituent documents of the joint venture between "Naftogaz" and PGNiG.

The main task of the joint venture will be assessing the state of Iraq's oil and gas infrastructure, restoring gas and oil pipelines, and oil storage and transshipment facilities. It is expected that the work will be carried out on the territory of the Polish sector of responsibility in Iraq, which covers about 80,000 km.

On December 10-11, Frolov, as part of an official Ukrainian delegation headed by Minister of Foreign Affairs of Ukraine Kostiantyn Hryshchenko, visited Iraq.

The heads of the interim administration and the governing council of Iraq expressed support for the Ukrainian company's intentions to participate in tenders for obtaining subcontracts for the reconstruction of Iraq, as well as the company's initiatives to create a joint venture to work in the Polish sector of responsibility.

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