Foreign firms line up to buy Iraqi oil

 

FOREIGN firms are still lining up to buy Iraqi crude oil despite assertions that contracts signed so far account for all the oil the United Nations allows Iraq to sell in the next six months, a senior Iraqi oil official said yesterday.

Demand for Iraqi crude far exceeded the quantities Iraq could sell under its oil for food deal with the United Nations which set a six month revenue ceiling of $2 billion, (£1.21 billion), the official from Iraq's State Organisation for the Marketing of Oil (SOMO), said.

Rising oil prices meant that Iraq had to lower its average amount of sales under the plan to 550,909 barrels per day (bpd) from an initial estimate of 750,000 bpd, he said.

"They are coming with their briefcases, driving all the way from Amman to Baghdad. We receive them all and sign tentative deals. Our policy is to keep in touch with our former clients," the official said.

He did not name the companies and did not disclose the number of contracts signed since the deal went into effect on December 10th, 1996.

SOMO could easily find customers willing to buy up to three million bpd if allowed unrestrained exports, he said.

The oil for food deal is designed to ease the impact of stringent trade sanctions imposed on Iraq in August, 1990, when its troops invaded Kuwait.

Industry and UN sources said on at the weekend the United Nations was holding up approval of some contracts submitted by Iraq, concerned that Baghdad's deals may exceed the $2 billion limit.