Since the American-led coalition ousted Iraqi dictator Saddam Hussein in 2003, Russia has been a bystander in efforts to stabilize Iraq. Many in Moscow even seem content that American forces are bogged down trying to contain the Iraqi insurgency, figuring that it buys time for Russia to restore its geopolitical influence in Central Asia and the Caucasus. One way Washington can get the Russian position to shift is by giving Moscow a direct stake in Iraq's reconstruction. Recognition of the Russian conglomerate Lukoil's right to develop Iraq's West Qurna energy deposits could provide more than enough incentive for Moscow to adopt a more cooperative line.
Lukoil signed a contract in 1997 with Saddam Hussein's regime to develop West Qurna, which is believed to contain a massive 15 billion barrels of oil. Baghdad canceled the deal in December 2002 reportedly because Saddam became outraged upon hearing reports that Lukoil was trying to hedge its bets. The company supposedly sought guarantees from Washington and Iraqi opposition groups that the contract would be honored in the event of regime change.
Lukoil maintains that it never violated the terms of the deal, and thus the pact should remain in force. Accordingly, Lukoil threatens to sue any entity that seeks to develop West Qurna, or even buy oil produced from it. Already, the company has pressured American occupation authorities and, subsequently, the post-Saddam Iraqi oil ministry to acknowledge the validity of the 1997 contract. The American-dominated Coalition Provisional Authority deferred the issue to Iraqis authorities, who have so far avoided giving Lukoil a clear answer, pending a review of all the Saddam-era oil deals.
ConocoPhillips' recent purchase of a 7.59 percent stake in Lukoil provides a boost for the Russian company's projects in Iraq. The deal gives ConocoPhillips a 17.5 percent interest in a Lukoil venture to develop the West Qurna field. Lukoil chief executive Vagit Y. Alekperov expressed optimism that the deals would "reduce the financial risks and expedite the Qurna field's commissioning." Iraqi oil officials, though, still claim to be studying the matter. If, however, they do decide to recognize the 1997 contract and allow Lukoil (with the support of its new American partner) to begin developing West Qurna, Russia's interests in Iraq would change dramatically. Instead of being indifferent, or even hostile to the American-led effort to pacify Iraq, Moscow would suddenly have an important stake in seeing reconstruction efforts succeed.
The challenge of promoting stability in the near- to medium-term in West Qurna is daunting. Any hope for success would seem to depend on collaboration between the United States and Russia. West Qurna is located in Shi'a territory, south of Baghdad where several opposition groupsincluding ones supported by Iranare operating. The area seems poised to experience prolonged turmoil. Rival Shi'a groups could end up fighting each other, and, at the same time, they could struggle to prevent Sunni Arabs from restoring their traditional influence in Iraq.
The American-led coalition has so far struggled to contain the rivalries in and around West Qurna. If US and British troops were to withdraw from Iraq, West Qurna would likely experience a sharp escalation of violence. Conversely, a troop buildup would appear to do little to improve the chances for stabilization.
Russia, which maintains a relatively friendly relationship with Iran, could inject a diplomatic component into the political calculus that could raise stabilization hopes. Specifically, Moscow could use its diplomatic clout to try to persuade Tehran to curb its assistance to Shi'a militant groups. Cutting off outside arms and other supplies could potentially go a long way in pacifying the area.
There is no guarantee that Iranian leaders would listen to their Russian counterparts: Tehran remains worried about the possibility of a US attempt to promote regime change, especially in the event that President George W. Bush wins reelection on November 2. Nevertheless, Russia has some powerful bargaining chips that can catch the attention of Iranian leaders. One such chip is nuclear cooperation. Russia has been a key partner in Tehran's efforts to develop its nuclear capacity. Russia, for example, has helped construct the $800-million Bushehr nuclear reactor. In addition, Russia stands to be a vital supplier of nuclear fuel for Iran's controversial research program. [For additional information see the Eurasia Insight archive].
Experts in Moscow caution that Russian-Iranian relations could turn tense quickly if Tehran were to rebuff Moscow on the arms supplies issue. For Moscow, however, the reward of securing West Qurna oil profits would likely be worth the risk.
Mark N. Katz is a professor of government and politics at George Mason University.