Three years ago the Russians decided to write off 10 billion of Iraqi debts in an international agreement with other Paris Club members. After several years of delay in actually sealing this deal, now the Russians have said they will go ahead and write off the 10 billion minus the 1 billion in accrued interest.
It is apparent the Russian government was stalling in writing off the debt to use this as leverage to acquire an oil contract in the southern oil fields of Iraq. Nothing was guaranteed but in any case it worked.
An agreement has been made with the Iraqi government and the Russians last June for the training of Iraqi’s in the oil industry by technical advisors from the Russian State owned Lukoil.
Russian officials did not want to officially write off the debt until guarantees were made to the Russian government that they too were to gain a lucrative oil contract in Iraq’s southern oil fields after the oil contracts pre-invasion were canceled by the Coalition Provisional Authority. Those contracts canceled were worth billions to the Russian government.
Now that the Russians State owned Oil Company Lukoil have an agreement with the Iraq Oil Ministry they have decided to write off the debt except for the 1 billion in accrued interest payable over a course of several years.
If Russia didn’t receive an Iraqi oil contract chances are most likely that they would have postponed the 10 billion write off. You will see now in the not so distant future Russian technical advisors traveling to Iraq to assist in developing the Qurna-2 oil field in southern Iraq if and when the security situation is at a more manageable level.
The sell of oil will always be in US dollars. I just had to say that I hear there’s people thinking Iraq is going to let the Russians buy the oil in Rubles.