As neatly reported by Energy Daily,  Russia is moving swiftly to develop projects in its own self-defined sector of the Caspian Sea.  Russia’s move offshore means it is now joining post-Soviet republics Azerbaijan, Kazakhstan and Turkmenistan in developing their claimed national sectors of the Caspian, leaving only Iran – stymied by U.S. trade sanctions barring significant foreign investment in its oil infrastructure – as the sole riverain nation unable to ramp up its offshore production.  But Lukoil is not focused on the Caspian alone as Iraq is in it targets as well.  As the article notes:

“…The Caspian basin is regarded as a treasure trove, with conservative estimates valuing its reserves at more than $12 trillion…. With the notable exception of Azerbaijan, however, U.S. regional influence is in decline, because of a combination of factors ranging from greed to arrogance, allowing Russia to pick up much of the slack and in some cases take the lead in developing Turkmenistan’s and Kazakhstan’s Caspian reserves.

…[Lukoil] is scheduled to discuss re-launching its West Qurna-2 project with Iraqi Oil Minister Hussain al-Shahristani at the upcoming World Economic Forum in Davos. While Baghdad currently maintains that the contract is invalid Alekperov remains optimistic, noting that after the Iraqi government adopts oil law legislation, “we will have all grounds to continue consultations with the (Iraqi Oil) Ministry and move on to the practical implementation of the West Qurna project.”If Lukoil succeeds in its efforts to retain the least to develop the site, the company will quickly become a major player in Iraq, as the West Qurna field is believed to contain 10-20 billion barrels of oil capable of producing one million barrels daily. Lukoil signed a production-sharing agreement development for the West Qurna-2 field in March 1997, which was to run until 2020, but the sanctions regime imposed against Iraq following the Gulf War prevented Russian companies from implementing oil projects in Iraq. At the end of 2002 Saddam’s government annulled the contract, saying that Lukoil had failed to implement its obligations under the contract. Given Washington’s influence in Baghdad, it seems unlikely that even now Lukoil will be able to revive the project, one of the Russian energy giant’s few setbacks. In the interim, Washington can only gaze northwards from Baku at Russia’s burgeoning Caspian development with envy.”