IRAQ SANCTIONS MONITOR Number 163
Thursday, November 30 2000
LATEST NEWS++++++
FRESH FROM ITS INTERNATIONAL PREMIERE.......
VHS copies of the film 'Big Ben to Baghdad', the epic account of last year's
journey in a 37-year-old Routemaster bus from London to the capital of
sanctions-engulfed Iraq. The 65-minute-film costs £9.99 from the Mariam
Appeal, 13a Borough High Street, London+++++++++++++++++LATEST
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Companies eye Iraq's power opportunities.
The $700 million budget of the UN Development Programme's (UNDP's)
electricity network rehabilitation programme (ENRP) for Iraq is attracting
considerable interest from international companies hoping to secure some of
the large-scale contracts scheduled to be tendered by the end of the year.
At least eight engineering consultants from across the world including
Europe, the US, India and Australia have been shortlisted and are in the
process of preparing bids for the upgrading of transmission lines and the
rehabilitation and rebuilding of substations in three northern regions. The
UNDP has also called for expressions of interest by 5 December in the
operation and maintenance of three 29-MW diesel power plants.
The UNDP has received 15 expressions of interest for the supply of nine
mini-hydro power plants. All 15 are likely to be invited to bid before the
end of the year.
The UNDP is responsible for the entire procurement, installation and
commissioning of electrical equipment needed for the rehabilitation of the
network in the three northern governorates of Irbil, Suleimaniya and Dohuk.
Source: MIDDLE EAST ECONOMIC DIGEST 01/12/2000
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Saddam Hussain makes fresh gains.
President Saddam Hussain has inflicted fresh blows on the increasingly
battered UN sanctions regime, by preparing to start oil exports to Syria
without UN approval and demanding a surcharge on every barrel of oil
exported under the UN oil-for-food programme.
On 21 November both Iraq and Syria announced that the Kirkuk-Banias oil
pipeline has been reopened, and will soon deliver up to 200,000 barrels a
day (b/d) to the Homs and Banias refineries. Industry sources say the oil
will be priced at a discount, allowing Syria to earn a premium through
exporting more of its own oil. Syria now produces some 550,000 b/d.
The UN says the step is not in conformity with its sanctions
imposed on Baghdad. According to the UN, such an agreement would need its
approval and the organisation has asked both Syria and Iraq for
clarification. The UN says it has not received an official answer from
either country, but has urged both of them to make sales legal under the
oil-for-food-programme.
In another move Iraq's state oil marketer SOMO has announced that from 1
December it will charge its customers a $0.50 premium over the official
selling price in the oil-for-food export programme supervised by the UN. The
payments are to be channelled to an account outside UN control.
Source: MIDDLE EAST ECONOMIC DIGEST 01/12/2000
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Russian foreign ministry says Iraq ready to discuss UN inspections.
Text of report by Russian news agency RIA
Moscow, 30th November: The director of the Russian Foreign Ministry's Middle
East and North Africa Department, Aleksandr Saltanov, said today that
Baghdad is ready to start a dialogue with the United Nations.
Saltanov told RIA that there was discussion at the Moscow talks between
Russian Foreign Minister Igor Ivanov and Iraqi Deputy Prime Minister Tariq
Aziz of the issue of Iraq's implementation of UN Security Council Resolution
1244, which envisages work by an inspections commission to check Iraq has no
prohibitted military programmes.
Iraq up to now has been refusing access to the commission's experts.
Saltanov said that the sides in the Moscow talks drew the conclusion that
the issue of resuming international monitoring in Iraq would be discussed
during the Baghdad-UN dialogue.
He added that major attention during the Moscow talks was devoted to
Russo-Iraqi bilateral relations. "Iraq traditionally always has been a
trading partner of our country", he said.
The sides discussed specific aspects of the development of trade and
economic relations both within the framework of humanitarian aid and for the
post-sanctions period.
Source: RIA news agency, Moscow, in Russian 0815 gmt 30 Nov
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Iraq's Aziz rejects new U.N. weapons inspectors.
MOSCOW, Nov 30 (Reuters) - Iraqi Deputy Prime Minister Tareq Aziz rejected
on Thursday the dispatch of new U.N. weapons inspectors to Baghdad, Russia's
Interfax news agency said.
Interfax quoted Aziz as saying bluntly "No" when asked whether Baghdad would
accept a mission under inspector Hans Blix. Aziz was questioned at the
airport, before leaving Moscow at the end of a two-day visit.
Russia has called for U.N. sanctions to be lifted against Iraq but urged
Baghdad to resume dialogue with the U.N. on the inspections issue.
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Iraq oil exports still rolling as deadline looms.
DUBAI, Nov 30 (Reuters) - Iraqi crude oil exports were still rolling out of
both loading ports on Thursday, but concern was mounting that sales would
stop on December 1 without an official United Nations price formula in
place,industry sources said.
The Iran Seva and the Sea Song were both loading Kirkuk grade from the
Turkish Mediterranean port of Ceyhan on Thursday, while the Arcadian One was
loading Basrah Light at the Iraqi Gulf port of Mina al-Bakr, industry
sources said.
The Front Pride, which was due to load Kirkuk, was withdrawn, the sources
added. Kirkuk flows were running at a normal rate of about 900,000 bpd on
Thursday.
An Iraqi oil official repeated on Thursday that Baghdad would defend its
original December price proposal, which the U.N. Sanctions Committee
rejected on Monday as too low.
"We are sticking with our prices which are in accordance with the market,"
he told Reuters.
Oil overseers at the U.N. have meanwhile kept the options open on Iraqi
flows, saying in a report that the world body could either allow exports to
continue without completed contracts or stop loadings, diplomats said on
Wednesday.
Iraqi officials have said repeatedly that Baghdad has no intention of
halting its 2.3 million barrels per day (bpd) of export sales.
But as of Thursday, state oil marketer SOMO had yet to release official
loading programmes for December, market sources said.
For now, however, liftings were continuing.
Some lifters of Iraqi barrels said on Wednesday that SOMO had pushed their
end-November loadings into December in an apparent bid to collect Baghdad's
requested 50-cent per barrel surcharge. An Iraqi oil official blamed any
deferrals on purely operational matters. "Operationally anything can happen
and vessels can slip from one month to another," he said.
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Iraqi plan threatens winter oil shortage.
A new confrontation between Iraq and the UN has raised the spectre of oil
supplies being disrupted this winter.
Baghdad's aim is to divert about $420m ( £300m) a year from the oil-for-food
programme controlled by the UN and put the money directly into the regime's
coffers.
To that end it is ostensibly cutting its oil price but asking customers to
pay a premium of 50 cents for each barrel into a special bank account in
Jordan, with the implied threat that contracts will not be renewed if they
fail to do so. The UN sanctions committee has rejected this plan, but talks
on an alternative mechanism are continuing.
In the absence of an agreement this month, legitimate oil supplies from Iraq
- which currently exports more than 2m barrels a day - could begin to dry
up. Some western diplomats believe Iraq is bluffing and would not, if it
came to the crunch, be willing to halt oil exports for the sake of gaining
more control over the money. But because prices in the petroleum market are
currently high, Iraq has accumulated a cash cushion of around $11bn that
would allow it to withstand a period without exports.
Last night Iraq and India announced a deal which the Iraqi vice-president,
Taha Yassin Ramadhan, hailed as a sign that the UN embargo against Iraq had
lost its meaning. `We will sell oil to any country which wants to buy it,"
he said on a visit to New Delhi.
Under the agreement Iraq will increase its oil supplies to India and India
will export surplus wheat to Iraq and help Iraq to upgrade its oil
refineries and explore its oil field at Tubah in the south.
It is believed that the deal is a fixed-price commitment for at least 20
years.
Source: GUARDIAN 30/11/2000 P16
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Russia, Iraq Discuss Cooperating In Emergencies - Itar-Tass.
NEW YORK - (Dow Jones)-Russian Minister for Emergency Situations Sergei
Shoigu and Iraqi Vice-Prime Minister Tareq Aziz met Wednesday to discuss
cooperation in warning and coping with emergency situations, Itar-Tass
reported Wednesday.
According to sources in the Russian ministry, the meeting was held under an
August 2000 memorandum signed by the two countries, in which they agreed to
exchange information on warning of natural calamities and industrial
incidents, Itar-Tass reported.
The two will also discuss reducing the risk of unexploded missiles and bombs
in Iraq. The Russian ministry plans to set up a center in Iraq to train
specialists to de-mine, according to the report.
The talks are being held while Aziz visits Moscow, where he is expected to
be until Thursday.
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UN weighs options, waits for new Iraqi Dec price formula.
United Nations (Platt's)-29Nov2000/506 pm EST/2206 GMT The UN Security
Council's Sanctions Committee on Iraq is weighing what action to take should
Iraq not send a new pricing list for its December oil sales, a committee
source said Wednesday. And with Dec 1 looming, the source said a disruption
in sales was certain without a revised formula. The committee on Monday
rejected Iraq's pricing formula for December because it was too low to
reflect fair market prices and asked Baghdad to send a revised, more
realistic formula. Iraq proposed the heavily discounted prices to compensate
buyers for a 50 cts/bbl charge Baghdad wants lifters to pay directly to it,
in a move to circumvent UN control. Under sanctions, all revenue from Iraqi
oil sales must go to a UN-controlled account.
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Jordan plans first "semi-commercial" flight to Iraq.
Dubai (Platt's)-29Nov2000/544 am EST/1044 GMT Jordan's Royal Jordanian
airline plans to send its first "semi-commercial" flight to Baghdad in more
than 10 years on Thursday, the Jordan Times newspaper reported Wednesday.
The paper quoted Transport Ministry Undersecretary Alaa Batayneh as saying
that under the arrangements for the so-called semi-commercial flights,
passengers must demonstrate they are flying to Iraq for specific
humanitarian reasons. He said Jordan would ensure the planned weekly flights
would be arranged through "the proper channels" but he did not elaborate.
Iraq has argued that the UN sanctions imposed against it in 1990 do not
apply to civilian flights. Some countries which have sent humanitarian
flights to Baghdad recently have only sent prior notification to the UN
Sanctions Committee.
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US says allies would make up for any Iraq oil cuts.
WASHINGTON, Nov 29 (Reuters) - The White House appeared untroubled by a
possible disruption of Iraqi oil supplies, saying on Wednesday that U.S.
allies have promised to make up for any shortfall and it also could tap the
U.S. oil reserve.
The oil markets are growing nervous that there may be a break in Iraqi oil
exports because of a dispute between Baghdad and the United Nations over the
price at which Iraq sells oil under the U.N. oil-for-food program.
The current six-month phase of the program, which allows Iraq to escape Gulf
War-era U.N. sanctions, expires on Dec. 5 and, if the dispute is not
resolved, some in the oil market say Iraqi exports could stop as early as
the end of this week.
"If Iraq decides to play games with the market and cut production
unilaterally, we have commitments from our allies to make up for any
shortfalls which might result," U.S. National Security Council spokesman
P.J. Crowley told Reuters.
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Iraq strengthens resolve on December oil pricing.
DUBAI, Nov 29 (Reuters) - Iraq is fortifying its defence of its December
crude oil pricing, making a break in export flows virtually inevitable from
Friday.
The United Nations on Monday rejected the pricing as too low.
"Our minister put things very clearly yesterday," an Iraqi oil official told
Reuters on Wednesday. "We are sticking with our original price proposal."
Oil Minister Amer Mohammed Rasheed told reporters in India that Baghdad
would defend its price formulae ahead of a December 1 deadline. At the same
time, Rasheed stressed that Baghdad wanted to avoid an interruption in
export sales of some 2.3 million barrels per day (bpd) under the U.N.
oil-for-food deal.
Iraq has asked the U.N. to extend current eighth-phase oil sales volume from
the six-month tranche's December 5 expiry to January 15 in order to avoid an
export gap. Industry sources reckon Baghdad still has nearly 80 million
barrels of unlifted crude oil contract volume remaining during the eighth
phase. "It is not our intention to stop exports," the Iraqi oil official
reiterated. "But we submitted the price mechanism and the United Nations
rejected it."
The official stopped short of blaming the world body for any potential halt
in Iraqi oil sales under the U.N. oil-for-food programme. "We don't want to
put it that way," he said.
Western diplomats said on Tuesday that Iraqi barrels cannot be exported
without an approved pricing plan, which could cause oil sales to grind to a
halt from Friday.
Customers of Iraqi crude oil are expecting a shortfall in flows in any case
next month, after several lifters reported that oil marketer SOMO had cut
their volumes apparently following the companies' refusal to cough up
Baghdad's newly-imposed 50-cent per barrel surcharge. "Under these
conditions, Iraqi oil is off limits," said a Western oil executive. "And now
we cannot count on Iraqi supply."
The Iraqi oil official said SOMO had not cancelled any crude oil liftings.
He declined to say whether exports in December would continue to run at
current levels.
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Russia to set up mine-clearing centre in Iraq.
Text of report in English by Russian AVN Military News Agency web site
Moscow, 29th November: Russian Emergencies Minister Sergey Shoygu is to meet
Iraqi Deputy Prime Minister Tariq Aziz in Moscow tonight, a spokesman for
the Emergencies Ministry told the Military News Agency.
The main topic of the negotiations is bilateral cooperation to prevent and
liquidate emergencies. In particular, they will discuss Russia's
participation in UN humanitarian operations in Iraq and establishment of a
Russian humanitarian mine-clearing centre in Iraq, the spokesman said.
According to the Iraqi Interior Ministry, there are about 450,000 unexploded
US air bombs on the territory of Iraq. However, the number of antipersonnel
mines and other explosive devices left after the armed conflicts in the
region is difficult to count.
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Saddam's former press aide appointed Arab League envoy - paper.
Text of report by London-based newspaper 'Al-Sharq al-Awsat' on 29th
November
Amman: Iraqi diplomatic sources told `Al-Sharq al-Awsat' in Amman that the
Iraqi government has decided to appoint President Saddam Husayn's former
press secretary Dr Muhsin Khalil as Iraq's permanent representative to the
Arab League to succeed Dr Sultan al-Shawi, who was summoned to Baghdad after
reaching the retirement age.
Khalil is currently the chairman of the Iraqi National Assembly's Legal
Affairs Committee. He previously served as Iraq's ambassador to Yemen. He
also headed the Iraqi Foreign Ministry's Arab department. Khalil was the
Iraqi president's press secretary during the Iraq-Iran war (1980-1988) and
is described as a tough diplomat who is familiar with the official [Iraqi]
media line.
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Baghdad mounts diplomatic offensive to end embargo.
BAGHDAD, Nov 29 (Reuters) - Iraq has begun a diplomatic offensive to win
Arab and world support for ending the decade-old United Nations trade
sanctions against Baghdad.
President Saddam Hussein sent Deputy Prime Minister Tareq Aziz to Damascus,
Beijing and Moscow to try to drum up support for his bid to end the
sanctions imposed after Iraqi troops invaded Kuwait in August 1990.
Aziz flew to Syria on Saturday on the first direct flight abroad by a senior
Iraqi senior official since the 1991 Gulf War, raising the stakes still
further in Baghdad's challenge to the sanctions.
Civilian flights in and out of Iraq have been banned since 1990, but Baghdad
has recently been chipping away at the air embargo, attracting a growing
stream of "humanitarian" flights.
Core sanctions remain in force, however, and only a U.N. Security Council
decision can remove them.
During his stay in Damascus, Aziz met Syrian Foreign Minister Farouq
al-Shara and discussed both sanctions and bilateral ties. These were severed
after the outbreak of the 1980-1988 Iraq-Iran war in which Syria sided with
Tehran, but the two sides agreed three years ago to restore relations and
resume economic cooperation.
Aziz went from Damascus to Beijing where he met President Jiang Zemin and
other top officials and secured Chinese support for ending the embargoes.
Then the Iraqi deputy premier flew on to Moscow, where he held talks on
Wednesday with Russian Foreign Minister Igor Ivanov.
Russia has played a key role in arguing for the lifting of sanctions, while
trying to persuade Iraq to cooperate with the U.N. in allowing inspectors to
complete checks into whether it holds weapons of mass destruction. In a
similar mission, Iraqi Vice-President Taha Yassin Ramadan is currently in
New Delhi holding talks with senior Indian officials.
Baghdad has rejected a U.N. resolution adopted last December which could
ease sanctions on Iraq once it allows a new arms inspection team to return.
U.N. inspectors have been barred since the last team left in mid-December
1998, shortly before Washington and London launched a four-day air campaign
against Iraq after accusing Saddam of hindering the work of arms inspectors.
U.N. Secretary-General Kofi Annan and Iraqi officials plan to begin talks
early in 2001 on how to break a two-year impasse on weapons inspections, the
key condition for lifting sanctions, diplomats in the world body reported on
Wednesday.
A high-level Iraqi delegation is expected to travel to New York in January,
after the Muslim holy month of Ramadan ends.
The meetings are a follow-up to Annan's talks with Izzat Ibrahim, vice
chairman of Iraq's Revolutionary Command Council, during an Islamic summit
in the Gulf state of Qatar on November 17.
In its latest diplomatic offensive, Baghdad is seeking the backing of the
countries visited by its officials for its defiance of two Western-imposed
no-fly zones in the north and south of the country. Western planes
patrolling these zones have met challenges from and struck at Iraqi air
defences almost daily since the United States and British launched extensive
air and missile attacks against Iraq in 1998.
Russia has repeatedly criticised Washington and London for imposing the
no-fly zones and said they were breaching U.N. resolutions. Chinese
officials have also criticised Western countries for setting up the zones.
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Conference on Iraq to discuss lifting of embargo.
MOSCOW, November 28 (Itar-Tass) - An international conference on the
problems of Iraq will be held in Yerevan on December 15 with the
participation of representatives of Russia, Great Britain, US and Iraq, Tass
was told on Tuesday by Aram Shegunts, the director-general of the committee
for international, cultural, scientific and business cooperation with Iraq.
On the agenda of the meeting which will be attended by MPs, representatives
of the public and diplomats of the four countries are items connected with
the situation in Iraq, with the practical steps to arrest and lift the
international economic embargo and with deliveries of humanitarian aid to
Baghdad, mostly from Russia.
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