July 30, 2001
Iraq will boost its trade and oil contracts with Russia in return for Moscow's support in the UN Security Council, Iraq's deputy oil minister said in comments published Saturday. "Owing to Russia's positive role in foiling the 'smart sanctions' proposal, Russian companies will be awarded contracts in the future in Iraq's oil, industrial and trade sectors," Deputy Oil Minister Faiz Shaheen told the Al-Ittihad weekly in an interview.
His comments show new warmth toward Russia on the part of the ministry. Previously it had criticized Russia for failing to implement contracts for the development of southern Iraqi oil fields. Russia threatened to use its veto early this month when the Security Council was considering a plan to overhaul the United Nations trade embargo on Iraq — the so-called "smart sanctions" proposal. Finally, U.S. and British diplomats dropped the plan, and the council renewed the standard oil-for-food program, as Iraq wanted, on July 3.
The smart sanctions would lift most of the restrictions on trade with Iraq imposed after its 1990 invasion of Kuwait. But they would also tighten enforcement of the arms embargo and block Iraqi smuggling routes. "Iraq will work to support the Russian economy in order to strengthen Russia's position against American and Western economic pressure," Shaheen said. "We have dealings with Russian oil companies under the oil-for-food program and we expect them to increase vastly in the near future," he added.
The program allows Iraq to sell oil on condition the proceeds are spent on food, medicine and other essential goods. During the past two years, Iraq has repeatedly criticized Russia and partly state-owned LUKoil for failing to develop its West Qurna field. Iraq even threatened to abrogate the contract awarded to the top Russian oil producer for the field's development, but it has not done so.
More Information on Sanctions Against Iraq
More Information on the Iraq Crisis
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