SENIOR EXECUTIVE INTELLIGENCE BRIEF

• Document Type: FOIA
• Collection: FOIA Collection
• Document Number (FOIA) /ESDN (CREST): 06629375
• Release Decision: RIPPUB
• Original Classification: U
• Document Page Count: 1
• Document Creation Date: December 28, 2022
• Document Release Date: December 11, 2017
• Case Number: F-2016-02334
• Publication Date: December 14, 2002

Approved for Release: 2017/11/28 C06629375
TOP RET/
SENIOR EXECUTIVE INTELLIGENCE BRIEF
14 December 2002
PASS SEIB 02-290CHX
Russia-Iraq: Using Energy Contracts as Leverage
Baghdad's sudden cancellation this week of its largest contract with a Russian firm is unlikely
to cause Moscow to abandon Baghdad completely. Russian firms have approximately $10
billion worth of other signed or potential contracts with Iraq, and the long-term agreement the
two countries may sign early next year has more than 60 other projects worth billions of dollars.
-- Under the terms of the canceled deal, a consortium led by the oil company Lukoil was to
develop the West Qurnah oilfield and receive at least 4 billion barrels of oil during the
length of the contract
In what appears to be a counterthreat, an unnamed Russian Government spokesman yesterday
told the media that Iraq's decision "removes one of the main reasons for Russia to oppose
military action" against it. Moscow has had some success in resolving similar disputes by sternly
reproaching Iraqi officials.
Lukoil has announced plans to challenge the Iraqi cancellation in an international
arbitration court.
The cancellation could be a tactical move by Baghdad to squeeze Moscow at a time when its
support in the UN is crucial. Iraq may have used the cancellation to send a message to Moscow
in advance of Security Council discussion of its WMD declaration, which it may expect to result
in increased US pressure on Russia.
Baghdad probably calculates that its use of the contract as leverage over Moscow will not
seriously damage their relationship. Baghdad may follow up with back-channel hints
about reinstating the deal based on Russia's position in coming Security Council debates,
where Moscow continues to be its strongest supporter.
The letter to the Lukoil-led consortium was signed by Iraq's deputy oil minister, and so it
may be easier for Iraq to retract than one signed by a higher-ranking official.
TO CRET
Approved for Release: 2017/11/28 C06629375