After Iraqi Kurds Lose Disputed Fields, Rosneft Can Kiss Oil Deals Goodbye
Russia's state-owned oil giant is another loser in the Iraqi victory over the Kurdish Regional Government
Speaking of bad bets in Iraq, Rosneft has made a bad one indeed. Russia’s state-owned oil giant has concluded $4 billion worth of deals with the Kurdistan Regional Government in northern Iraq. At least $400 million of that was for development of oil fields disputed by Baghdad and the Kurds.
These would be oil fields which the Kurds took control of in 2014 when the Iraqi army melted away before onslaught of ISIS from eastern Syria. These oil fields, albeit until recently under Kurdish military control, were not legally part of the Kurdistan Regional Government, but continued to be claimed for direct Baghdad rule.
This meant that when Rosneft agreed to jointly develop the fields with the Kurds, Baghdad protested angrily. Protests which Rosneft’s Igor Sechin dismissed out of hand saying “I am not a politician, my job is to produce oil.”
Except that now a lighting-fast offensive has recaptured the disputed oil fields for the Iraqi central government. Having paid no attention to Iraqi concerns at the time, it is safe to say that when Baghdad again sells the share in the fields Sechin won’t be invited to buy — except perhaps at a giant premium.
Sechin though he was being a cold hard realist dealing with the facts on the ground, only to be taught the reality those facts can change in a heartbeat leaving him with worthless papers, and a bad disposition with the new owners of the fields he thought he had locked in.
This was a serious miscalculation by the Russian State owned Rosneft, a long time ago. It suggested that there were Aparachniks inside the Russian SOE; who truly believed that Masoud Barzani’s Kurdistan was a lasting entity. But it also suggested Rosneft’s unscrupulous corruption.
After the US-led invasion of Iraq in 2003, it was said that there would be a second invasion by foreign oil companies; to gobble up what was left of Iraq’s State owned oil fields. In this regard, the State Capitalist Russian Federation; held no moral high ground at all. It was no better than any of the other parasites lining up to stitch deals in Iraq.
I have tears in my eyes… this is not US company, but someone else!