Talks between Prime Minister Vladimir Putin and Iraqi counterpart Nouri al-Maliki on Friday produced a breakthrough agreement that would allow Russian oil companies such as LUKoil to revive prewar contracts in the Gulf state.

A triumphant Energy Minister Sergei Shmatko told reporters just minutes after the meeting that Iraqi authorities had agreed to begin talks on renewing prewar deals, a major departure from Baghdad's previous stance that Russian companies would have to compete for the fields on an equal footing.

"It's not that it's a small sensation, but it's important news," Shmatko said. "A goal has been set to restore the contracts that were concluded before the war. ... I believe it's very major progress."

LUKoil, Russia's second-biggest oil producer, and mid-sized oil company Tatneft would be some of the biggest winners if Iraq agreed to honor contracts that were signed before a U.S.-led invasion toppled Saddam Hussein in 2003. Violence in the country has subsided recently, raising the chances of developing the world's third-largest oil reserves.

A working group will convene in the near future to "revive" the contracts, Shmatko said.

"We are now gaining quite a good foothold in this rich and promising country," he said.

As for future oil deals, the Iraqi officials said Russian companies would bid on equal terms with their foreign rivals, Shmatko said.

Cabinet spokesman Dmitry Peskov whisked Shmatko away after his brief statement, preventing further questions.

In February 2008, Finance Minister Alexei Kudrin said Russia would write off the bulk of Iraq's $12.9 billion debt, although the concession did not help LUKoil win back rights to develop the large West Qurna-2 field.

Baghdad has renegotiated and signed a Hussein-era deal with the Chinese National Petroleum Company but said at the time that such decisions would be on a case-by-case basis.

An Iraq standing by the old deals would be a consolation prize for Russia, which vehemently opposed the war. The Iraqi government, confident of its ability to maintain security, won an agreement in November committing the United States to withdraw its troops by the end of 2011.

"The positive dynamics, of course, make for growing trust in Iraq as a promising international partner," Putin said at a briefing after the talks, referring to the planned troop withdrawal and improving security conditions.

The business part of the talks, Putin said, focused on oil and gas cooperation, where the countries enjoy "very solid, positive experience."

Russia and Iraq are also looking to renew trade in Russian military hardware, Putin said. He said he accepted an invitation to visit Iraq without saying when the trip might take place.

Al-Maliki said his country was grateful for past business cooperation and was looking forward to re-establishing ties.

"Iraq remembers well Russian companies that had helped us in different areas, including the oil and gas industry. ... We are sure that Russian companies can be and must be our important partners at the current stage as well," he said, standing alongside Putin at the briefing.

On Saturday, al-Maliki and his ministers met with Russian business leaders to encourage them to invest in his country. His government has already approved Rosneft, the country's largest oil producer, Gazprom Neft, the oil arm of Gazprom, LUKoil and Tatneft to bid for projects.

LUKoil is seeking to reinstate its 1997 contract to develop the West Qurna-2 field under a production sharing agreement. LUKoil said it could not start work on the contract because of the international sanctions to punish Iraq for its attack on Kuwait in 1991, a delay that prompted Hussein to tear up the agreement in 2002.

Vagit Alekperov, LUKoil's chief, met al-Maliki during the visit and said Saturday that the talks were fruitful. The company is ready to alter the West Qurna-2 contract, which initially required a $4 billion investment, in order to comply with current Iraqi legislation, Alekperov said. LUKoil has said it will split its interest in West Qurna-2 with 20 percent shareholder ConocoPhillips, giving the U.S. producer 17.5 percent in the project.

Tatneft had also made some progress in Iraq that it would like to capitalize on. Three months before the U.S.-led invasion, the Tatarstan-based producer signed a memorandum of understanding to develop Block 9 in Iraq's western desert. Tatneft is interested in resuming negotiations to develop this and another block in the area, deputy CEO Khamit Kaveyev told the Iraqi delegation Saturday. The company will bid for Block 9, he said.

During his short appearance Friday, Shmatko also said Iraq made a number of "tempting" proposals for Russian companies to rebuild and upgrade the country's electricity facilities.