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Putin weighs regime change in barrels of
oil
By Sergei Blagov
MOSCOW -
President Vladimir Putin has ended a visit to Germany
and France with firm statements of opposition to
"unilateral" or "unreasonable" use of force in Iraq. But
it has been a three-way balancing act with Europe, the
US and Russia's interest in dollars and oil.
Reminders of Russia's interests awaited Putin's
return to Moscow. While he was away in Europe, the
Baghdad has been telling Russian leaders how much money
there is for them in Iraqi oil.
More than a
decade after the iron curtain came down, Putin is
straddling something of an iron fence. On all sides of
it there is much to gain - and much to lose.
Iraqi trade minister Mohammad Mehdi Saleh
announced Monday, as Putin toured Europe, that Russia
had lost US$60 billion of business due to the United
Nations sanctions. He said that despite the loss,
substantial new business awaits Russia.
Russia
and Iraq are negotiating a 10-year trade agreement that
would include 67 agreements in oil, agriculture,
transportation, railways and energy, Saleh said. These
agreements could be worth more than $40 billion to
Russia.
The Iraqi message is clear. There is
money for Russia in Iraq, if only ...
The same
day acting oil minister Samir Abdulaziz al-Najem told
Russian journalists in Baghdad that he hopes in the UN
Security Council Russia would veto any use of force
against Iraq.
The oil minister also made two
other announcements; one, that the Russian company
LUKOil's $3.7 billion project to develop the West Qurna
oilfield is off, and second, that another Russian firm
could be picked to replace LUKOil.
Russia and
Iraq have a history of trading that goes back to the
Cold War days. Iraq owes Russia $7 billion in trade
debt. It has sought to repay the arrears partly by
granting Russia preferential trading status.
With the world's second largest proven oil
reserves estimated at 112.5 billion barrels - 11 percent
of the world total - an accessible Iraq is big bounty
for Russian oil companies.
Russian oil giants
also fear a crash in oil prices if US companies move
into Iraq. Iraqi oil is of high quality, and easy to
produce. That makes it a formidable competition for
Russia's own crude of medium quality, extracted at high
cost.
The nightmare scenario for Russia remains
a collapse in oil prices below $12 to $14 a barrel - its
production cost. Oil fetches half of Russia's hard
currency earnings.
With this in view, Communist
party leader Gennady Zyuganov warned Wednesday that US
control over Iraqi oilfields would eventually ruin
Russian economy.
"Iraq's true guilt is that this
country owns fantastic oil reserves," says Valery
Manilov, deputy in the Federation Council, the upper
house of Russian parliament. "Russia has to oppose war,
but without confrontation."
That seemed to
define Putin's policy. Putin says unilateral action
"outside of international law" would be a "grave error".
But he told TF1 Television in France that he saw no need
for Russia at present to use its veto as a permanent
member of the Security Council. He added, however, that
Russia would be prepared to veto "unreasonable use of
force."
Putin said "one-sided use of force"
would lead to suffering for millions of people and
escalate tension in the whole region. But he spoke also
against inciting "anti-American feelings".
Putin
has said earlier that "if Iraq begins to make problems
for the inspectors, Russia could change its position and
agree with the United States on new, tougher actions by
the UN Security Council".
That statement has
been open to diverging interpretations. It was seen as a
sign that Russia could quickly change its anti-war
stand, as a warning to Iraq to get real and give Russia
a chance to defend it in the Security Council, and as an
offering of sorts to the US.
But through all
this, it is clear at least that Russia is opposed to any
immediate attack on Iraq.
Putin's position
fronts deep differences within the country. Russia
should try to mediate between the US and Europe but not
play on differences, Vladimir Lukin, deputy speaker of
the Duma, the lower house of Russian parliament, told
media representatives in Moscow Tuesday.
The
influential daily Izvestia cautioned the government
against stepping into the internal rift within NATO
(North Atlantic Treaty Organization). To play a role
here would be to step into a "diplomatic minefield", the
newspaper wrote Tuesday. Everything Russians say on Iraq
these days is followed by a 'but' something else.
(Inter Press Service)
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