RUSSIA LOST BILLIONS
A lot of very expensive projects have been swept away with the
war
A lot of very expensive projects have been swept away with the
war
Countless news reports about the army
operation in Iraq have pushed into the background the fact that the Russian
economy faces a very serious threat on account of the war. Russian Foreign
Minister Igor Ivanov released an official statement that the Russian Federation
would stand for its legal economic interests in the Persian Gulf. However, the
foreign minister’s statement was basically ignored on account of war news and
everything that was connected with it. Ivanov’s words were basically lost.
However, Viktor Khristenko, the Vice Prime Minister of the Russian government,
decided to warn OPEC countries yesterday. As Khristenko said, OPEC might stop
its existence after the war in Iraq is finished.
According to the
official’s logic, the OPEC's wish to become a political organization as a result
of the war in Iraq, will eventually destroy the oil organization. If OPEC starts
playing economic games during the Iraqi conflict, the organization will have to
face the end of its existence soon. Viktor Khristenko explained his position
with the fact that OPEC’s quantitative losses that it might suffer during the
war, will pale in comparison with the losses that it might have, if it gets
implicated in political processes. As it can be seen, Viktor Khristenko is not
against OPEC’s existence, although he insists that nothing is supposed to change
in the international organization. The Russian vice prime minister would like to
see it the way it is now.
Of course, Russia achieved very good progress
in the oil export field last year. Russia even managed to leave the world
leader, Saudi Arabia, behind in this respect (just within several days). It is
an open secret that the oil industry of the country had to take very much effort
to achieve that. Experts have no doubts that the Russian oil industry
experiences a very strong need of modernization. The industry needs a lot of
investments for that, although neither the USA, nor other Western countries are
ready to provide that. One could borrow something from everyone, from OPEC
countries in particular. However, Viktor Khristenko prefers to preach potential
investors, taking into consideration the fact that Russia’s success in the oil
field is currently burning in Iraq.
As a matter of fact, OPEC has always
had a lot of political functions to fulfil, although it is a purely economic
organization. The world order is changing in front of our own eyes now, so any
international organization is supposed to change too, if it wants to live
further on. It is not ruled out that the increase of OPEC's political role at a
crucial moment of discrepancy between exporters and consumers of oil might be
very good both for the organization and for the whole world.
Instead of
bidding goodbye to OPEC, it would be very good for the Russian government to sit
down and to evaluate the country’s losses on account of the war. Russia has
invested a lot in the oil industry of Iraq. All that will be lost, no matter
what the Russian Foreign Ministry might do. Russian companies that work in Iraq
have already started counting their losses. According to the information that
Russian media get, the losses are large. There are no doubts left that no
Russian company will manage to preserve its contracts in Iraq after the war is
over.
The administration of the company MachineImport acknowledged that
it had delivered drilling rigs to Iraq in the sum of $30 million. The company
has its base in the city of Rumeila. The city is reportedly on fire at the
moment. This means that the Russian unpaid equipment is burning there too. It
will never be paid. MachineImport signed a contract with the UN to drill 30
wells on Garaf oil deposit. The cost of the contract was evaluated in the sum of
430 million dollars. The war has virtually cancelled the contract. The Oil for
Food program stipulated for other contracts in the total sum of $75 million.
They do not cost anything today. MachineImport had to give away all of its
property to local authorities - eight drilling rigs, offices and even apartments
in Baghdad and Basra. All that property was insured, although it goes without
saying that no one will manage to compensate that completely.
Other
Russian oil companies had to do the same. Lukoil-Overseas and Zarubezhneft, for
example, also left their offices and other real estate at the disposal of "local
law-enforcement bodies." Security guards sealed offices of another Russian
company, TechnoPromImport. This company built two large heat and power plants in
Iraq. It goes without saying that armed Iraqi soldiers have more important
things to do than to guard someone else’s property.
Directors of all
mentioned companies stated that they would defend their rights for their
property at international courts. However, managers acknowledged that that they
will have no shots to win, if the power in Iraq changes. Russian companies
already mark their Iraqi property as losses. It deems that the Russian
government will have to do the same soon.
Experts of the Russian cabinet
of ministers calculated that Russian loss of profit in Iraq made up 40 billion
dollars, plus eight billion dollars of the Iraqi debt. The new Iraqi government
is not likely to acknowledge that. Oil prices will go down, when Baghdad
surrenders. This will cause incredible damage to the Russian budget. Before the
war, Russia gained two billion dollars a year within the scope of the
international program Oil for Food. That money has been lost too.
The
experiences that Russian companies obtained in Iraq will be wasted without any
demand. That is why, it is time Russia should think over an opportunity to join
OPEC. It is absolutely not good for the country to preach this organization now.
However, as Russians say, good ideas always come late.
Akhtyam Akhtyrov
PRAVDA.Ru
Translated by Dmitry Sudakov
Related links:
PRAVDA.Ru
Bush Offers Putin 10 Billion for Saddam ’s Head http://english.pravda.ru/main/2002/10/25/38643.html
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