RIYADH, Aug 21: Russia is moving ahead to forge closer economic ties with the countries of the Middle East. While it has just negotiated a $40 billion trade agreement with Iraq, as announced two days back, two Russian oil companies are also reported to be vying for a stake in the multi-billion dollar development of four oil fields in northern Kuwait. These indicate Russia’s growing interest in the region, many here believe.

The Russian Sineft oil company has already qualified as a bidder for the plum project and another Russian oil company Lukoil is also striving to be pre-qualified for the bidding process, energy sources here indicated.

Over the last few years private sector in the Russian oil industry has emerged significantly powerful. Most of the analysts here in Dhahran, the virtual global energy capital, believe that these private oil companies have played a pivotal role in the development of the Russian oil sector in recent years. Analysts also argue that the recent hesitation of Russia to continue siding with the Opec on oil output issue was also at the insistence of the private sector in its oil and gas industry.

The private sector, due to its own business objectives wants to sell higher volumes of oil in the global market, when the prices of oil are at a higher level.

Now it seems that the expanded and the powerful energy industry in Russia, after a period of consolidating ownership, domestic acquisition and restructuring at a time of higher oil prices, has begun to look beyond their own borders.

Owing to all these developments, Russia has also emerged as one of the leading oil producer and exporter in the world. From roughly 6 million barrels a day production, some two years back, Russian production is now reported at around 7.1 million barrels a day.

The Kuwait deal is still far from finalized and it would take considerable time before it is known who gets stake in the Kuwaiti oilfields. There is also a big if attached to this equation. Lukoil already has interests in the development of Iraq’s oil sector.

The four Kuwaiti fields in the north of the country, close to its borders with Iraq, have an estimated reserve of 5 billion barrels and are currently producing 400,000 barrels a day. Under the plans initially drawn up by Kuwait, partnership with foreign operators should increase that to 900,000 barrels per day within the next few years.

Kuwaiti parliament is still to approve the project, for which nearly 20 companies had been pre-qualified. Analysts believe the Kuwaiti parliament would take considerable time before giving its go-ahead signal to the project, if at all.