Source Pravda.Ru

Iraq In Exchange for Saudi Oil?

Russian oil companies will soon gain access to Arabian oilfields
More and more evidence appears to prove the fact that Iraqi oil is as important to the world as never before. And the bargaining between Russia and the USA concerning the Iraqi problem is looked upon from a different point of view now. Could anyone imagine just a year ago that Russian oil companies would be given access to such a strategic prize of US national interests: Saudi oilfields? Er-Riyadh passed a decision on the access of Russian oil companies to the Saudi oilfields two weeks after the first joint session held by the intergovernmental commission for commercial economic and commercial technical cooperation in Moscow in the middle of October.

Well-informed Russian sources told RIA Novosti that the Saudi authorities decided to allow Russian oil and gas companies to work on the development of oil and gas fields in Saudi Arabia. This means that Russian companies might develop three new gas fields. At that, Russian companies will be given access to the fields at the initial stage; they are likely to receive subcontracts for the delivery and setting up of equipment necessary for the development of the fields. Exxon Mobil, Shell, and British Petroleum still remain the principal companies in Saudi Arabia for the development of new fields.

Saudi Arabia gave up the idea of developing its oil and gas industry independently at the end of 1998. Saudi sheikhs offered American companies the chance to deal with the promising industry first. However, as usually happens, more companies from other developed countries came following the American ones. Until now, the Saudi authorities had a secret veto on the access of Russian companies to the country.

This was despite the fact that diplomatic relations between Russia and Saudi Arabia were restored in September 1990 and an agreement on cultural, economic, and financial cooperation was concluded between the two countries in 1994. Until now, the agreements remained on paper only and were slightly implemented. Commodity turnover between Russia and Saudi Arabia was ridiculous: it made up 57 million dollars in 2000 and 67 million in 2001. This year, the situation has changed for the best; the commodity turnover made up 53 million dollars over the first six months of 2002. Three high-ranking Saudi delegations visited Russia this year; the recent visit of Saudi Minister for Finance and National Economy Ibrahim Abd al-Aziz al-Assaf to Moscow got things moving.

It is obvious that Russian oil companies will be allowed to Saudi oil fields, but they will only be given what others won’t consider. However, the first step is the hardest. Russian companies were not born yesterday: as soon as they are allowed to the oil fields, it will be difficult to drive them out.

The Saudi economy is traditionally oriented toward the USA, and Americans truly consider Saudi sheikhs their main allies in the Middle East. However, the 9/11 tragedy seriously marred America-Saudi relations. Although no official accusations have been made, US reports say that it is obvious that the money the USA pays for Saudi Arabian oil is being spent on the development of vakhabism (which is the same as terrorism). These reports can only be issued with the sanctions of the US State Department.

Saudi Arabia immediately took responsive measures. The withdrawal of Saudi capital from the USA was took place within a very short period, which scared investors of the world. Moreover, Saudi officials revealed their interest in Russian weapons, which caused a nervous reaction in the US defense establishment. Saudi Minister for Defense and Aviation Prince Sultan bin Abd Al-Aziz said on Monday that if the USA refuses to sell weapons to Saudi Arabia, it would find arms on other markets, Russia’s news agency RIA Novosti informs.

It is true that America-Saudi cooperation won’t end, and the complete withdrawal of Saudi capital from the USA is out of the question. Saudi Arabia became the first Arab state where the press is persuading the people of the insecurity of the US banking system. It’s also useless to believe that the USA will give up Saudi oil imports and immediately start buying Russian oil.

To some extent, Russia has come in handy for the old allies in the situation. Especially since it’s important to convince Russia to go along with America’s new world order. It’s important to secure Russia’s political loyalty to the Western world, the of western companies to its resources, and if necessary, to use Russia’s armed forces for US foreign political interests. It is clear that Washington isn’t going to compensate Russia’s losses after its war against Iraq. It is just bad luck that Russia needs much more than what the Americans expected to give. That is why access to Saudi oil fields for Russia is probably meant to be a sugar pill to sweeten the bitterness of Russia’s present-day political weakness.

Dmitry Slobodanuk PRAVDA.Ru

Translated by Maria Gousseva

Read the original in Russian: http://economics.pravda.ru/economics/2002/7/21/64/2189_.html

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