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Iran Troops Have Made Partial Withdrawal

BAGHDAD (Reuters) -- Iranian troops have withdrawn partially from a disputed oil well claimed by both Tehran and Baghdad, an Iraqi spokesman said today, possibly defusing a border feud straining the two countries' delicate ties.

Government spokesman Ali al-Dabbagh said a small group of Iranian troops who had taken over an oil well in a remote region along the Iran-Iraq border last week were no longer in control of the well, which Iraq considers part of its Fakka oilfield.

"The Iranian flag has been lowered. The Iranian troops have pulled back 50 metres, but they have not gone back to where they were before. The Iraqi government asked for the troops to go back to where they were," Dabbagh said.

Dabbagh said a joint committee would begin to look at demarcating the border in the desert area southeast of Baghdad.

The border flare-up kicked off a storm of emergency meetings and bilateral phone calls, with Baghdad calling for an immediate withdrawal of foreign troops yet also seeking to contain damage to its charged relationship with neighboring Iran.

In a phone conversation on the evening of December 19, Iranian Foreign Minister Manouchehr Mottaki and his Iraqi counterpart Hoshiyar Zebari underlined the need for a meeting "with the intention of enforcing bilateral border agreements," Iranian state broadcaster IRIB reported.

Global oil prices climbed on December 18 following initial media reports that Iranian troops had commandeered an Iraqi oil well.

The news was all the more worrisome as Iraq prepares to sign giant contracts with leading global oil firms, a milestone in its efforts to turn around its oil sector and secure foreign cash despite ongoing violence and other obstacles to investment.

Conflict with fellow Shi'ite Muslim Iran, a sometimes rival that shares deep historic and religious ties with Iraq, is an especially sensitive issue for Iraqi officials several months before parliamentary elections on March 7.

As the Iraqi government moves firmly out of the postwar U.S. shadow, even Iraqi officials friendly with Tehran cannot afford to be seen as bowing to any foreign powers, especially Iran.

Dusty Outposts

Even after Dabbagh's announcement, there was confusion in southern Iraq about the status of the Iranian troops, reflecting the difficulty of defining clear borders in such an remote, uninhabited area.

Border outposts dot the Iraqi side of the border, where Iranian facilities can be seen in the distance across bare expanses of sand and dirt.

Sarhan al-Moussawi, a member of the Maysan provincial council, said he believed the Iranian forces had withdrawn entirely to the Iranian side of the border.

Iran and Iraq have a long history of border feuds, including one that escalated into a bloody eight-year war in the 1980s. The relationship warmed after Saddam Hussein's ouster in 2003, when fellow Shi'ite Muslims took over in Baghdad and the countries' trade and religious tourism picked up.

According to Iraqis, the field is one of seven that comprise Fakka, a relatively small field that now produces about 10,000 barrels of oil per day.

But Iraqi officials say the well in question has only been operative briefly -- right before the Iran-Iraq war in the late 1970s -- and has been still since.

Iraq's Oil Ministry offered global companies a development contract for Fakka and nearby fields in an energy auction in June. But a Chinese consortium declined the ministry's proposed fee for running the fields.

The government is hoping that a host of new deals, some of which are due to be initialled this week, will transform the outdated oil industry and bring production capacity to an impressive 12 million bpd in six or seven years.

That would put Iraq just behind Saudi Arabia, the world's top oil producer.