Publication: Monitor Volume: 5 Issue: 201

Russian and Iraqi diplomats yesterday denied reports that Russian oil companies may be violating UN sanctions by moving to fulfill oil development contracts signed earlier with authorities in Baghdad. Speaking to reporters yesterday at the UN in New York, Russian UN ambassador Sergei Lavrov said only that whatever work has gotten underway in Iraq is within the framework of the UN sanctions regime for Iraq. He did not elaborate.

Yesterday’s remarks by Lavrov were in response to a report published by an Iraqi newspaper on October 27. It quoted Iraqi Oil Minister Amir Muhammed Rasheed as saying that Russian oil companies had begun implementing US$400 million worth of contracts in Iraq. The newspaper said that the contracts included the development of oil refineries and the southern oilfields of al-Lihais, stage six of Rumailah and various gas fields. Reports yesterday suggested that the Russian companies Tatneft, Bashneft and Rosneft are involved in the work in Iraq (Reuters, October 27; Dow Jones Newswires, October 28).

This week’s reports are certain to grab attention in Washington and elsewhere. In recent months Baghdad has begun to increase its pressure on Russian companies to begin oil development work in Iraq despite the UN sanctions. The Russian government and the Russian companies involved–which include oil giant LUKoil– had earlier resisted such blandishments from Baghdad. A visit by Russian Fuel and Energy Minister Viktor Kaluzhny to Iraq earlier this fall, however, appeared to signal a possible change in that policy. Upon his return to Moscow Kaluzhny announced that Russian companies had signed some US$57 million in new contracts with Iraq. He also strongly hinted that Russian authorities were now prepared to look the other way if Russian companies decide to begin fulfilling contracts with Iraq (AP, October 7; Vremya MN, October 6; see the Monitor, October 8).

An unnamed Western diplomat was quoted yesterday as saying, “I can’t believe that Russia would actually go ahead and break sanctions.” Moscow is, after all, “a permanent member of the Security Council” (Dow Jones Newswires, October 28). Kalyuzhny’s remark, however, suggests that Moscow may now be examining ways in which to get around the UN sanctions regime. That would certainly meet the interests of Russia’s oil sector, which stands to make billions from work in Iraq. What remains unclear is whether it would meet the interests of Russia’ s current government. Although Russian leaders have obviously taken great pleasure in thumbing their collective nose at the West–and particularly at Washington–on a number of issues of late, it would be another matter altogether to violate a UN Security Council resolution.