Iraq To Resume Exports Until Jan. Sunday December 3, 2000 3:40 pm

BAGHDAD, Iraq (AP) - Two days after it stopped pumping oil, Iraq announced Sunday it will resume exporting its crude to fulfill contracts already signed under the U.N.-approved oil-for-food deal.

Iraq halted production Friday after the United Nations rejected its proposed oil price for December, a price U.N. experts said was too low. Iraq's proposal was seen as part of an attempt to get around U.N. controls on Iraqi oil profits.

``The Iraqi oil policy has been always aimed at stability of the world oil market. Iraq has absolutely no intention to terminate or hinder the exports of its crude in the world market,'' Oil Minister Amer Mohammed Rashid said at a news conference Sunday announcing the resumption of exports.

He said Iraq is working with U.N. oil overseers to export the full quantity of oil agreed to under the current six-month phase of the oil-for-food deal. This phase is due to end Tuesday, but because of the disruption in pumping will now be extended until sometime in January.

Iraq, under sanctions for 10 years, needs the sanctions committee to approve its proposed prices to export its oil each month. Under the oil-for-food program, profits from Iraqi exports go into an escrow bank account so the United Nations can monitor the money's use.

But Iraq wants buyers of its crude to pay a surcharge of 50 cents a barrel into an Iraqi-controlled account. The low price formula proposed by Baghdad last week was believed to be an attempt to compensate buyers for the surcharge.

Companies have indicated an unwillingness to pay the surcharge since it would violate U.N. sanctions.

Rashid defended Iraq's prices, saying they are fair and in the interest of the Iraqi people. He said he is discussing the prices with the overseers, whom he said ``are under political pressure.''

``There is better understanding of our position,'' he said. ``We are optimistic to reach an agreement because we have no intention to hinder oil exports.''

Rashid denied that Iraq has conditions to resume its exports. ``Iraq is annoyed at this position. The American pressure was behind the stoppage of the oil flow,'' he said.

The sanctions committee has said oil companies under new contracts can continue loading Iraqi crude onto tankers, but cannot pay for it until Iraq proposes December prices that are in line with fair market value.

Rashid also said Iraq will consider extending the oil-for-food program for another phase once a resolution is issued at the U.N. Security Council, but criticized the program for not fulfilling its purpose.

``We have exported more than $38 billion. Only $8.5 billion worth of contracts have arrived,'' he said. ``About $3.5 billion worth of contracts are on hold while there is $14-15 billion frozen in banks. ... The deal is a failure.''

http://www.guardianunlimited.co.uk/breakingnews/International/0,3561,591185,00.html

-- Martin Thompson (mthom1927@aol.com), December 03, 2000