Global Policy Forum

By James Whittington

Russia's biggest oil company, Lukoil, is fighting to hold onto its claims to oil fields in Iraq should there be a change of government in Baghdad.

The West Qurna oil field in Iraq contains one of the world's largest oil reserves. Since 1997, Lukoil has had a 68.5% stake in a production sharing arrangement with the Iraqi government. There is currently no activity on the site because of the sanctions imposed by the United Nations.

But Lukoil hopes that once the restrictions are lifted the oil field will become a major part of its international operations. However, there is fear at the Russian oil giant that this concession could become worthless in an era post-Saddam Hussein.

Lukoil executives worry that US oil companies are desperate to play a role in the rebuilding of Iraq as a global oil giant. The boss of Lukoil, Vagit Alekperov, has said that he has had assurances that oil is at the top of the agenda in Moscow's negotiations with Washington on what to do with Iraq.

At the UN, Russia and the US are locked in frantic discussions about a tough new resolution to force Mr Hussein surrender weapons of mass destruction. If Mr Hussein fails to comply, such a resolution could pave the way for military action against Baghdad.

US President George W Bush has repeatedly called for the removal of Mr Hussein and wants Russian support for a resolution that could make this possible. But, as a permanent member of the UN Security Council, Russia wants some commercial guarantees for backing the US line. So far Russia has resisted a new UN resolution. And of the other five permanent members of the UN Security Council, China and France have also signed oil deals with Iraq over the past few years. They too will want to have safeguards for their agreements. And like Russia they have resisted the idea that the UN should authorise an US attack on Iraq.

As the international diplomacy continues, it is seems ever more certain that a diplomatic solution may partly depend on who gets the billions of dollars worth of business in Iraq once sanctions are lifted.

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