Iraq Oil for food and OPEC.Its a good thing that we can take these two events out of our way, there are many players on the sidelines just waiting to get in as soon as these two matters be resolved and it seems like they just have.
This may very well prove to be a major non-even as far as oil prices are concerned. And if that is so, you'll be sure to see major relief buying on this sector.
Press release follows....
Saturday November 29 3:33 PM EST
Iraq Says It Accepts New U.N. Oil-For-Food Deal
By Leon Barkho
BAGHDAD (Reuters) - Iraq on Saturday said it accepted in principle an extension of its
oil-for-food deal with the United Nations, despite its reported reservations on the implementation of
the deal.
"Iraq does not object, in principle, to the renewal of the agreement for (selling) oil in return for food,
medicine and other humanitarian needs with the United Nations," a spokesman for the Iraqi Culture
and Information ministry said in a statement published by the official news agency INA.
The spokesman said Baghdad still viewed the scheme, which allows Iraq to export oil worth $2
billion over six months, as a temporary measure and not a substitute for the removal of all curbs on
the country's oil exports, imposed as part of sweeping sanctions following Iraq's 1990 invasion of
Kuwait.
On Thursday, a U.N. spokesman in Baghdad said Iraq was not willing to renew the deal until issues
related to the approval of contracts, delivery of supplies and letters of credit were solved.
The previous day Iraqi Health Minister Umeed Madhat Mubarak told reporters the United States had
been blocking medical contracts negotiated under the scheme.
Iraq says thousands of children die each month because of a shortage of medical supplies and
equipment caused by the sanctions.
The deal first came into effect in December last year and was renewed by the U.N. Security Council
for another six months from June 8. The current phase of the plan expires on December 5.
Of the $2 billion worth of oil sold every six months, Iraq receives $1.32 billion. The remainder is
earmarked for reparations of war victims from the 1991 Gulf War and for the cost of U.N. arms
inspectors charged with ridding Iraq of weapons of mass destruction.
INA reported that Iraqi leader Saddam Hussein on Saturday discussed with his cabinet the current
political situation and Iraq's relations with the U.N. Security Council and the Special Commission in
charge of arms inspections.
"President Saddam Hussein chaired the the 40th session of the Council of Ministers. The council
reviewed the Arab and international situation and the relations with the Security Council and the
Special Commission," INA said.
The agency gave no further details.
Earlier Iraq said a U.S. U-2 spy plane flew over Iraq ..."to carry out provocation and espionage
activities."
INA, quoting an official spokesman, said the plane entered Iraqi skies at 9.20 a.m. (0620 GMT)
flying at high altitude beyond the reach of Iraqi air defenses.
"Iraqi systems and air defenses have been monitoring the plane since its entrance up to its exit. Let
it (the plane) be followed by curses," the spokesman said.
Iraq has said it would shoot down the plane, conducting U.N. surveillance, if it flew within the range
of its air defenses. It has also demanded that the United Nations replace the American spy plane
with aircraft from other permanent members of the U.N. Security Council.
INA also reported that Saddam met Russian Communist Party leader Gennady Zyuganov on
Saturday and hailed cooperation between their two countries.
Russia brokered a deal with Baghdad earlier this month which allowed the arms inspectors, including
Americans, to resume activities in Iraq. In return Russia promised to work for the lifting of
sanctions.
Baghdad sparked a tense standoff with the United Nations on October 29 when it banned Americans
from U.N. arms inspection teams, saying they were spying for Washington.
"Iraq co-operates in an active and sincere manner with Russia to bring the initiative to success," it
quoted Saddam as saying.
The U.N. weapons inspectors visited more sites in Iraq on Saturday as an official newspaper called
a senior member of the international monitoring team "a spy and agent" of the United States.
Al-Jumhouriya daily lashed out at Nils Carlstrom, director of the Baghdad Monitoring and
Verification Centre, for a statement this week in which he criticized the Iraqi government for putting
up a sign reading "Down with America!" at an airport used by inspectors.
"What has made this Swedish (man) to lose his temper and condemn a slogan?...This issue proves
Iraq's charges that the (U.N.) Special Commission consists of spies and agents," Jumhouriya said in
a front page editorial.
As the inspectors headed out for Iraqi sites for the eighth consecutive day it was not clear if they
planned to include any "sensitive" locations which Baghdad has maintained were off-limits.
Baghdad says it has no more weapons to hide while the U.S. and the U.N. say Baghdad is still
concealing biological and chemical weapons.
A clean bill of health is needed from the U.N. Special Commission, in charge of arms inspections,
before sanctions are lifted.
U.N. Secretary-General Kofi Annan decided on Friday against recommending a specific increase in
the amount of oil that Iraq could sell in the next six months to buy food.
The diplomats said instead of recommending a specific increase in the amount of oil that Iraq could
sell, Annan would suggest the Security Council examine the possibility of raising Iraq's oil revenues
in the light of a steady slide in the living standard of the average Iraqi.
But they said the U.N. chief would not propose any figure himself, despite pleas from U.N. aid
agencies to do so.
U.N. envoys said Annan had considered recommending the Security Council raise to $3 billion the oil
Iraq could sell for the next six months. |
