Quit shaking and read this:
Iraq Favors Russia
Saddam Hussein's anger over a U.S. and British-led push to revamp the decade-old U.N. sanctions regime against Iraq could give a boost to Russian companies eager to develop Iraqi oilfields. Iraq's Trade Ministry announced on July 9 that it would stop giving preferential treatment to France, after the French backed so-called "smart sanctions," which would tighten import controls on equipment that could be used for military purposes. Instead, Iraq will give greater priority to trade with Russia, which threatened to veto the plan.
Although Russian oil majors have long wanted to produce oil in Iraq, they so far have honored U.N. sanctions against such activities. But companies such as Lukoil, which has obtained licenses for Iraq's rich West Qurmah oilfield, are positioning themselves to cash in, figuring sanctions eventually will be loosened. Russian oil companies "are flush with cash" and see Iraq as "a natural expansion platform," says a Moscow oil analyst.
The French shouldn't be counted out yet, though. Russian oil companies alone won't be able to provide the investment needed to revive Iraq's decrepit oil industry. And Iraqis are more likely to welcome investment from the French than from companies in the U.S. and Britain. That could still benefit France's TotalFinaElf, which has long had its eye on developing big fields in southern Iraq. Meanwhile, Iraq is expected to channel a large chunk of the trade allowed under the U.N.'s just-renewed oil-for-food program to neighboring Turkey, Syria, and Jordan--as well as Russia. |
