The scandal, sometimes nicknamed "UNSCAM" or "oil-for-fraud", has turned ugly in recent months. In July, Ihsan Karim, head of the Board of Supreme Audit and the Iraqi official heading the investigation into the oil-for-food program, was killed in a bomb attack. Also in July, the US House committee issued a subpoena for financial records from Banque Nationale de Paris, a French bank that handled oil-for-food funds. It remains unclear whether Russian companies are mentioned in Iraqi audit records, or if they could be subpoenaed in the US.
Russia has been wary of a graft probe into the UN-run Iraq oil-for-food program as its companies would be among the first candidates to come under scrutiny. Russian officials have expressed reservations over the UN inquiry and described it as a "historical inquiry", with diplomats arguing that Moscow did not want to look backward into the history of the old issue of the Iraqi humanitarian program. Russia has also insisted that accusations of oil-for-food graft were intended to elbow the Russians away from Iraqi riches.
As Iraq's largest suppliers in the UN oil-for-food program, Russian companies still work on contracts related to the rebuilding the country's infrastructure under the oil-for-food program, reportedly totaling about $1 billion. However, in May Russia ordered all of its citizens in Iraq to leave the country after the escalating hostage crisis there. Moscow also blamed the exodus on the US-led coalition forces' failure to control the overall security situation in Iraq.
Yet despite some acrimony, Moscow has been keen not to alienate Baghdad. "We are willing to talk either with the existing Iraqi government or with the one to come to power via elections, which we hope will take place on time in January next year," Fedotov stated this month. "We are ready to negotiate with the Iraqi government, as well as authorities due to come to power following the elections, which, we hope, will be held in time, in January next year," he said.
Therefore, Moscow has made it clear it would be willing to deal with any upcoming Iraqi administration. Yet apart from eyeing Iraqi hydrocarbon riches, Moscow has been mulling more proactive policy in the region. Russia has repeatedly called for an international conference on Iraq. Last June, Russia also revealed a plan to work out a collective security initiative for the Persian Gulf region, which would be based on mutual security guarantees.
Meanwhile, Russian officials this month indicated plans to co-sponsor, jointly with Saudi Arabia, an international energy forum in February. The meeting in Riyadh is supposed to discuss problems such as perceived oil market overheating as well as measures to forestall a possible sharp decline in oil prices. Yet it remains to be seen whether the joint conference in Riyadh, or continued volatility in Iraq, could prove instrumental in preventing a possible oil-price fall. - LINK