U.N. Secretary General Kofi Annan released his quarterly report on the oil-for-food program on March 6th ahead of a full U.N. Security Council discussion on the program scheduled for March 8th, warning Iraq against demanding surcharges on oil sales and criticizing Baghdad for putting oil exports on hold.
The report also scolded Iraq for ordering insufficient health, education, water and sanitation supplies for its people under the humanitarian program. Annan also said that: “Given its proven capacity, I urge the government of Iraq to increase its daily average rate of exports under the program to at least the levels in the previous phase.”
He indicated that Iraq’s oil revenues fund has lost about $2.2 billion due to lower oil exports since early December.
Iraqi oil exports totaled about 1.3 million b/d in February from about 2.2 million b/d during the last six-month phase of the program.
Industry sources said on March 5th that Iraqi exports should climb to about 1.5 million b/d in March, down from Iraqi state oil marketer SOMO’s ambitious target of 2 million b/d. Annan’s report also said that Baghdad had refused to allow U.N. experts to study the possibility of adding an Iraqi-Syrian pipeline to the list of Iraq’s approved export routes under the oil-for-food program.
The pipeline, closed since 1982, was reportedly reopened in late 2000 with a flow rate of at least 100,000 b/d of oil outside the oil-for-food program.
U.S. Secretary of State Colin Powell had in February persuaded Syrain President Bashar al-Assad to put the pipeline under the humanitarian program, but Iraqi officials continue to deny that the line is in operation.
Baghdad has informed the U.N. that securing alternative oil export routes is not “among Iraq’s current priorities.”
The report also said that the number of holds placed by the sanctions committee on humanitarian goods and oil spare parts was “unacceptably high.”
While Annan did not mention the U.S. by name, most of the $3.1 billion worth of contracts in question had been blocked by Washington. Powell is currently reviewing the blocked contracts and plans to release a large number of them.
© 2001 Mena Report (www.menareport.com)