Friends in need are friends indeed

Iranian President Mahmoud Ahmadinejad (l) and Iraqi leader Jalal Talabani, in Tehran last year.

It was, finally, the beginning of the end. The Iraqis had lost over 40,000 troops in a single battle, defending Basra from Iran's Karbala 5 assault. The Iranians, meanwhile, had lost 65,000 troops on the same field, some to Saddam's chemical weapons. In retaliation, over the course of 42 days, Iraq attacked 65 cities in 226 sorties, bombing civilian neighborhoods and butchering women and children - the latest in a series of ugly exchanges between two proud nations, shattered by years at each other's throats.

Twenty years later, and neither nation has ever recovered from that brutal, bloody war. However, if June 1987 marked a key point in the Iran-Iraq war, then perhaps June 2007 may prove the springboard for a further twenty years of peace between the two countries. Increasingly, it looks as though the two are prepared to do business together, in order to extricate themselves from present-day woes.

Last week came the news that Iran wants to develop previously untapped oil fields shared with its neighbour. "We hope to start working together. Both countries stand to gain. We would strengthen investment and make the best use of our shared fields," Gholamhossein Nozari, managing director of state-owned National Iranian Oil Company (NIOC), told reporters.

"We have many joint fields like Naftshahr, Paidar-e Gharb, Azar, Azadegan and so many others," he said on the sidelines of a conference in Tehran organised by Iran's Ravand Institute for Economic and International Studies. "There is a general agreement between us [on the fields]," he continued, adding that the two countries had already held two rounds of discussions on developing ‘green', or previously untapped, oilfields.

It was the latest in a series of statements surely calculated to antagonise Washington, but which also make good business sense from both sides' perspectives. Last month, Iraq's Oil Ministry announced that Iraq had already invited Iranian firms to bid for contracts to build at least four oil refineries in the country. It is clear that Iraq needs to attract investment from foreign firms to develop fields and boost output, and it would be a great surprise were its government now to turn around and spurn Iran's offer of cooperation. Likewise, Iran's oilfields need at least US$100bn worth of foreign investment over the next decade to boost output by 1 million barrels per day (bpd) to 5 million bpd, according to Abdollmohammad Delparish of NIOC.

To help meet this target, Iran has announced plans to launch an investment fund outside the Islamic Republic to raise finance for its huge South Pars gas field, and so circumvent a financial squeeze by Washington. As the US pushes for tighter sanctions on Iran over its atomic work, the head of the Pars Oil and Gas Company said Tehran would base the fund in either Dubai or Bahrain.

In the thick of the modern Middle East and its interminable crises, the two nations appear to have come to the conclusion, finally, that they can help themselves through economic cooperation. It may have taken a couple of decades, but a step alongside your one-time enemy, is a step forward.

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