MOSCOW, Feb 11: Russia on Monday forgave nearly all the $12.9 billion debt owed it by Iraq and voiced hopes of increased Russian investment in the war-torn country, news agencies quoted Finance Minister Alexei Kudrin as saying.

The amount forgiven — $12 billion — came to 93 per cent of the mainly Soviet-era debt owed by Baghdad to Moscow, Interfax news agency reported.

The debt is being written off in stages, with the process probably completed next year, Kudrin was quoted as saying by Interfax.

The remaining $900 million will be restructured over a 17 year period, Kudrin said.

The deal was signed during a visit by Iraqi Foreign Minister Hoshyar Zebari.

The Iraqi foreign minister and his Russian counterpart, Sergei Lavrov, earlier signed an accord on economic cooperation.

Lavrov said he hoped for “an energetic impulse to trade relations between the two countries” and said “Russia is counting on launching promising joint projects, above all in the oil-gas sphere and in the area of energy generation,” ITAR-TASS reported.

Kudrin was quoted as saying that Moscow was ready to invest some four billion dollars in Iraq. “We are interested in the complete restoration of Iraq’s economy ... many Russian businesses are ready to work on the Iraqi market.”

An example, Kudrin said, was Lukoil which in 1997 signed a multi-billion dollar contract to develop the huge West Qurna 2 field but had to leave Iraq after falling out with the government of Saddam Hussein.

Lukoil is looking to return to Iraq but last year the Iraqi oil minister warned that the Russian company would not get special favours in any bidding process.

Iraq’s new oil law allows the revision of all Saddam-era contracts.—AFP