To: Hawkmoon who wrote (8439 ) 5/14/1999 7:45:00 PM From: goldsnow Read Replies (2) | Respond to of 17770
as for evil Saddam... FOCUS-U.S. may decide on easing Iraq oil embargo 01:29 p.m May 14, 1999 Eastern By Bernie Woodall NEW YORK, May 14 (Reuters) - The White House is expected to decide later on Friday whether to support an easing of the oil embargo on Iraq, allowing foreign companies to invest in the country for the first time since the Gulf War to boost Iraqi oil exports and increase humanitarian relief. State Department advisers have recommended that the Administration support such an easing but make it conditional on Baghdad allowing weapons inspectors back into Iraq, a U.S. government source told Reuters on Thursday. The U.S. policy on Iraq has been one of containment since the Gulf War, using United Nations resolutions to keep tight reins on Baghdad through a weapons inspection regime and the ''oil-for-food'' program, which has allowed Iraq limited oil sales since December 1996 to relieve the suffering of ordinary Iraqis and other Gulf War victims. But the policy has unraveled as Russia, France and China -- three of the five Security Council members with veto power -- have broken ranks and pushed for an end to sanctions. With the schism on the Security Council, where Britain supports the United States, Iraq forced a series of crises over weapons inspections, which led to last December's expulsion of U.N. inspectors and the ensuing Anglo-American bombing campaign against Iraq. The White House is considering its Iraq policy as U.N. diplomats prepare draft resolutions to rework the oil embargo, including one which would allow foreign oil companies back in under ''technical service contracts'' to repair Iraq's broken-down oil infrastructure. Senior State Department officials, meeting on Wednesday, agreed to advise the White House to make these concessions. On a more immediate basis, the U.S. continues to consider giving its okay to eliminating the monetary cap on oil sales, currently about $10.5 billion a year. The ceiling has been well above Iraq's capacity to produce since it was put in place last year, but it would be a factor later this year if oil prices remain strong. The idea of allowing foreign companies in may be tied to the passage of an omnibus U.N. Security Council resolution on Iraq proposed by the British and the Dutch. ''The bottom line is to keep sanctions on,'' said the U.S. official, who requested anonymity. Even if foreign investment is approved, Iraq can scupper it by not cooperating, diplomats point out. But Iraq's Security Council supporters might push it to accept. Companies such as France's Elf (ELFP.PA) and Total (TOTF.PA), a consortium of Russian oil companies led by LUKoil (LKOH.RTS), and the China National Oil Co. have signed or have pending oil agreements with Iraq and are expected to be involved if short-term foreign investment is allowed. Russia's current position is to push for a lifting of most economic sanctions against Iraq as soon as possible, including the oil embargo. Russia's U.N. representative Sergei Lavrov said on Thursday that Russia will not compromise its position. The oil embargo has been in place since Iraq's 1990 invasion of Kuwait. Even if foreign investment is allowed and the monetary cap is lifted, Iraq is unlikely to be able to sell much more oil until next year, oil experts have said. Due to war damage and the ensuing neglect of its infrastructure, Iraq's oil production is only at about 60 percent of its pre-war capacity. Experts say it will take until spring 2000 to make the repairs needed to increase its output back to pre-war levels. In Paris, a French foreign ministry official criticised the U.S move as ''not being the right approach since it does not solve the problem of Iraq's disarmament or reintegration into the international community. ''What is important is to re-establish a normal, global relationship between Iraq and the United Nations,'' the official, who asked not to be identified, told reporters. He said Paris backed application of Security Council resolution 687 whose main points were: lifting the international embargo once Iraq was disarmed; continued, long-term control to avoid Iraqi rearmament; and lifting sanctions and reintegrating Iraq into the international community. ((Paris newsroom +331 4221 5339, fax +331 4236 1072, paris.newsroom+reuters.com)) Copyright 1999 Reuters Limited.