Global Policy Forum

The director of a state-owned oil company with interests in Iraq on Tuesday accused U.S. companies of attempting to blackmail Russian oil majors into financing Iraqi opposition parties in return for contract guarantees from a post-Saddam Hussein regime.

"The Americans have tried to discuss the issue, including at a level of [direct negotiations] with companies," said Nikolai Tokarev, head of Zarubezhneft, which has been operating in Iraq since the 1960s. "They even proposed we should finance the Iraqi opposition in return for being able to continue work there," he said in an interview published in Vremya Novostei on Tuesday.

The statement reflected growing concern among Russian officials and businessmen that a possible U.S. military operation in Iraq could damage Moscow's economic interests in the country.

Russia fears that a new regime in Iraq might renege on Baghdad's obligations to pay off its $7 billion Soviet-era debt to Moscow and award lucrative oil contracts to U.S. and other Western companies, snubbing Russian firms.

Tokarev said he had turned down such deals as "dishonorable." Some other Russian companies, however, have accepted similar U.S. proposals and have become involved in a "dirty game," he said, without providing further details. He was unavailable for further comment Tuesday.

Tokarev also slammed the United States for its plans to overthrow Hussein, saying the U.S. government was only after access to Iraq's vast supplies of cheap oil.

"For the Americans this venture, despite all the political rhetoric, is aimed at gaining control over the oil market," he said.

U.S. President George W. Bush has assured President Vladimir Putin that Russia will be a major player in building a postwar Iraq, U.S. officials say, but Tokarev and other Russian businessmen remain distrustful.

A spokesman for the U.S. Embassy said Tuesday, "We are unaware of any such conversations or deals to protect Russian contracts in return for contributions to the Iraqi opposition."

According to Iraqi officials, Russian oil companies account for 35 percent to 40 percent of Iraqi oil exported under the UN oil-for-food program. Tokarev said the rigid, UN-prescribed pricing policy had made business difficult.

The United States and Britain have initiated a new pricing policy to keep Baghdad from subverting the humanitarian program and reaping illegal financing and kickbacks. Tokarev said the new policy had greatly increased commercial risks for traders buying Iraqi oil and resulted in Russian companies failing to purchase 15 percent to 20 percent of the crude allocated to them by the Iraqi government.

International sanctions against Iraq have prevented Zarubezhneft and other Russian companies from fulfilling a 1997 contract to develop the vast West Qurna oil field. Tokarev said that his company, together with another state oil company, Rosneft, was discussing a contract to develop oil fields near the port of Basra in southern Iraq.

Meanwhile, Russia warned the United States on Tuesday against using the standoff with Iraq over its alleged possession of weapons of mass destruction as a pretext for attempting to overthrow the regime in Baghdad.

"Work on eliminating Iraqi weapons of mass destruction cannot be replaced by efforts to change the incumbent Iraqi regime," Foreign Ministry spokesman Alexander Yakovenko was quoted by Interfax as saying.

"An attempt to secure the UN's blessing to remove the legitimate Iraqi leadership will damage the [UN's] authority," Yakovenko said.