INTERVIEW-Russia eyes deals in oil-rich northern Iraq

Published 10/12/2010, 11:23 AM
Updated 10/12/2010, 11:28 AM

* Russia keen to revive ties with Iraq in post-Saddam era

* Talking to Kurdistan directly about various projects

By Maria Golovnina

BAGHDAD, Oct 12 (Reuters) - Russia is talking directly with Iraq's oil-rich Kurdistan region about investment opportunities there, Russia's ambassador to Iraq said on Tuesday, a strategy that could irritate Iraq's central government.

Baghdad is at odds with the semi-autonomous northern region and has strongly opposed oil deals the Kurds have signed independently with foreign companies. The row has halted exports from Kurdish oilfields.

Speaking inside the heavily fortified Russian embassy compound in Baghdad, ambassador Valerian Shuvayev said Russian delegates often visited Kurdistan to explore opportunities.

"They go to Kurdistan quite a lot. There is nothing concrete but both sides are thinking about how to take this further," he said in an interview.

Asked if Russian companies considered signing contracts with Kurdistan directly, Shuvayev said: "Why not? If (a project) is feasible, then why not. And there have been talks." He was tight-lipped on the details and declined to name the companies.

Shuvayev said the Russian firms looked mainly at non-oil projects to avoid friction with the federal government but some talks had also taken place in the energy sector.

"Some affiliated companies have tried to do something there but I have not heard of any great success," he said.

Russia had a cosy relationship with Iraqi dictator Saddam Hussein, supplying him with weapons and winning the right to develop West Qurna -- one of the world's biggest oilfields.

Saddam tore up that deal in 2002, months before the U.S. invasion that ousted him, saying the Russians had failed to live up to their side of the contract.

Sitting on some of the world's biggest oil reserves, Iraq has opened its energy sector to foreign investment, triggering fierce competition among international oil companies.

Moscow is now looking for ways back into Iraq's war-battered economy, which needs investment in practically every sector.

STABLE KURDS

While most Iraqis are struggling to overcome the effects of a seven-year war, the semi-autonomous Kurdish region remains stable and many investors are keen to tap its vast oilfields. Some also see it as an entry point for the rest of Iraq.

Shuvayev said Russian firms were in talks on participation in several sectors of Iraq's economy.

"Yes, it's all happening rather spontaneously. It's not like it's a planned offensive," he said. "Talks are under way. ... There is readiness from both sides (to develop relations)."

Moscow bolstered its influence after Russian oil company LUKOIL, part of a broader consortium, sealed a 20-year deal to develop the second phase of West Qurna last year.

A separate Gazprom Neft-led group aims to start drilling in Badrah oilfield next year.

Russia's No. 3 oil company, TNK-BP, qualified to bid in next week's auction for three gas fields, an Iraqi official said this week.

Shuvayev said Moscow was realistic about its role in Iraq.

"The current government is completely different, so returning (to Saddam-era ties) would not be possible," he said.

"Russia was against the U.S. operation, not because we were Saddam's advocates, even though, and we are not hiding this, we had a well developed system of cooperation with the previous regime."

He said Iraq-Russia ties have historically been close, pointing to the abundance of Soviet-designed AK-47 automatic rifles on the streets as an example.

"Only one out of 10 rifles you see at checkpoints around here is U.S.-made," he said, smiling. "There is a certain psychological link and overturning it completely is not always effective." (Writing by Maria Golovnina, editing by Tim Pearce)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2025 - Fusion Media Limited. All Rights Reserved.