- CAIRO (AFP) - Iraq should
return to the oil market within months if the administration to be set
up by the US-led coalition that toppled Saddam Hussein gets a legal mandate
to sign exports contracts, experts said Thursday.
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- "It appears as though the damage to the southern
oil fields is not too bad," said Bill Farren-Price from the Cyprus-based
Middle East Economic Survey.
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- "If that is so, it should be possible to restore
most of Iraq's 2.7 million barrels per day (bpd) production in the coming
months," he added.
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- The southern fields, captured on the first days of the
war by the coalition, account for more than two thirds of Iraq's production.
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- The rest is pumped out from the northern fields around
Kirkuk that have continued -- despite the war -- to supply the Turkish
terminal of Cehyan, on the Mediterranean, an indication of little damage
done so far to them.
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- Kirkuk fell Thursday to the US-backed Kurdish forces.
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- On Wednesday, the pipeline delivered 84,000 barrels to
storage tanks in Ceyhan that now hold 8.2 million barrels of Iraqi crude
that are waiting for a legal signature to be sold, said Thursday New York's
Oil Daily.
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- "The continuation of the flow seems an indication
that at least some of the Kirkuk fields are still producing oil. An assessment
of the condition of the fields is possible only after fighting in the north
has ended," it added.
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- In the early days of the war the pipeline was carrying
close to its typical 700,000-800,000 bpd, but volumes have dropped since.
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- But the oil stored in Ceyhan could not be sold during
the war as communication with Iraq's state-oil marketer Somo was lost.
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- "No one would want to load this oil and then discover
it was illegal to do so," said Kevin Norrish from Barclays Capital
in London.
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- The UN Security Council passed on March 28 resolution
1472 to resume the "oil for food" program suspended shortly before
the war, and entrusted UN Secretary General Kofi Annan to spend funds available
from past oil sales.
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- But it sidestepped the contentious issue of whose signature
will replace Iraq's on oil sale contracts that finance the purchase of
food and medicine under this program designed to alleviate the impact of
UN sanctions imposed after Iraq's seven-month occupation of Kuwait in 1990-1991.
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- Diplomatic wrangling continued on the UN role in post-war
Iraq, with Russia and the European Union seeking a greater role for the
world body than the United States appears ready to allow.
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- A US-appointed official, retired General Jay Garner,
is preparing to take temporary control of the country. It is yet not known
whether it will be his administration that will sign potential oil contracts.
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- The picture becomes more blurred on the period to follow
the current phase of the "oil for food" program, which will come
to an end in May.
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- Will the program be renewed? Will the UN sanctions be
lifted altogether now that Saddam is gone? And who will be in charge of
the oil sector?
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- US Secretary of State Colin Powell said Thursday the
United States will seek a series of UN resolutions endorsing a future Iraqi
government, oil sales and humanitarian aid in the aftermath of the war
with Iraq.
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- Figures published in different studies on Iraq's reconstruction
put the investment needed to bring production capacity back to the pre-1991
Gulf war level of 3.5 million bpd in the range of three to five billion
dollars.
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- This level could be achieved in two years.
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- Another 30 to 40 billion dollars will be needed to boost
capacity to between six and eight million bpd, six to eight years from
now, but this would depend very much on global energy needs and quota problems
within the Organisation of Petroleum Exporting Countries (OPEC).
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- Some analysts predict that a post-war Iraq could kill
off OPEC if it were to leave the cartel in a bid to produce as much oil
as it can outside the quota system designed to maintain prices between
22 and 28 dollars per barrel.
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