By Emil Danielyan
An Armenian drug company owned by a pro-Iraqi parliamentarian confirmed on Thursday reports that it has won the right to buy and resell 2 million barrels of Iraqi crude oil under the UN oil-for-food program.
The company called Shtap Ognutyun is the first Armenian entity to join the international list of Iraqi crude dealers.
Its main shareholder, Ghukas Ulikhanian, told RFE/RL that the decision to grant Shtap Ognutyun its first-ever oil quota was taken by the Iraqi government last month. He said more than a dozen Armenian companies had applied for such allocations last year.
Nefte Compass, an online publication on the oil and gas industry in the former Soviet Union and Eastern Europe, reported last week that Baghdad’s entire oil quota for Armenia is likely to be set at 7 million barrels. But the Armenian foreign ministry claimed on Thursday that it has received no information to that effect from the Iraqi government. A ministry spokeswoman said the reported figure “does not correspond to reality.”
But according to Ulikhanian, all Armenian companies taking an interest in Iraq are coordinating their actions with the authorities in Yerevan and are in constant touch with the Armenian embassy in Baghdad. He said he does not know how much oil Iraq will allocate to other Armenian firms.
Among them are Grand Group, the country’s leading cigarette and candy manufacturer; the Vedi Alco liquor firm and the Pharmatech drug company owned by Vache Manukian, a British-Armenian tycoon. All of them hope to gain access to the Iraqi market. The Grand Group chairman, Hrant Vartanian, told RFE/RL that his company’s bid for an oil quota is still being considered by the Iraqis.
Ulikhanian said Shtap Ognutyun will buy Iraqi oil at a lower-than-average price set by a special UN body overseeing the decade-long international sanctions against the regime of President Saddam Hussein. He said it will sell the crude in the European and U.S. markets. Shtap Ognutyun will likely pay for the quota with its own products.
Worries over an imminent U.S. attack on oil-rich Iraq kept oil prices near year-high levels on Thursday, with international benchmark Brent crude oil trading at $27.41 per barrel in London.
Ulikhanian, who leads a multi-partisan Armenia-Iraq “friendship group” in the Armenian parliament, said he hopes that the United States “will not launch a military campaign against Iraq” in view of “the difficult plight of the Iraqi people.” “Among them are about 20,000 ethnic Armenians,” he added.
Ulikhanian’s business-oriented parliamentary group has been a driving force behind recent year’s diplomatic contacts between Armenia and Iraq. The lawmaker, who is affiliated with the opposition Hanrapetutyun (Republic) party, said last January that the two governments plan to set up a commission on bilateral economic cooperation. An Iraqi diplomat in Yerevan confirmed the information, saying that his country will grant Armenian companies a $200 million import quota worth once the commission begins its work.
According to Nefte Compass, Armenia is not the first former Soviet country to be awarded Iraqi crude barrels, with companies from Ukraine and Belarus having received similar allocations in the past. The biggest recipients of the Iraqi quotas are Russian energy companies that are expected to net at least 40 percent of the total allocated under the current 12th phase the UN program.
Iraq has exported more than 67 million barrels of crude over the past five months.