20070809 westqurnairaqoil 51347670 18
A view of the Khabbaz productive site north of Baghdad in 2003, when a contract to develop the rich West-Qurna oil field had been awarded to Russia's Lukoil but was annulled by Baghdad. - 


Scott Jagow: Ever since oil prices hit a record high above $78 last week, those prices have been sliding back. This morning, oil is trading below $72 a barrel. But what's happening in Russia today has big potential to move the markets. Iraq's oil minister is in Moscow to meet with his Russian counterpart, and he'll also meet with executives from a big Russian oil company. As Lisa Napoli reports, this bargaining table is loaded with history.

Lisa Napoli: The Iraqis still owe the Russians about $10 billion for arms they bought back in the '80s.

And the Russians want their hands on Iraq's untapped West Qurna field, said to hold 16 billion barrels of oil. A 10-year-old deal Lukoil had struck to run it was scuttled at the start of the war.

Tom Wallin of Energy Intelligence says now, the Russians may be thinking . . .

Tom Wallin: We'll forgive your debt, if you give us back access to this oil field that was taken away before.

Of course, nothing involving oil or Iraq is quite so simple. Even if the two nations could come to terms — and that's a big if — Severin Borenstein of the University of California Energy Institute says . . .

Severin Borenstein: I don't think that these sorts of financial deals are where the problem is. The problem is the security in Iraq.

If Lukoil does get a foothold in West Qurna, at least one U.S. company stands to gain. ConocoPhillips owns 20 percent of the Russian oil giant.

In Los Angeles, I'm Lisa Napoli for Marketplace.