Iraq has dropped Japan, Britain and the Netherlands as clients for its crude exports under the UN oil-for-food accord, the State Oil Marketing Organisation (SOMO) announced yesterday. SOMO director Mr Saddam Zaban Hassan, quoted in newspapers, said Iraq has not renewed its contracts with oil companies from the three countries. He did not give a reason.

Sanctions-hit Baghdad is set to resume exports under the UN deal which allows limited exports of Iraqi crude to finance imports of food and medicine.

Exports were launched in December and a second six-month term for exports of up to two billion dollars worth of crude started in June. But Iraq suspended its exports in June pending an agreement on a new food distribution plan.

Mr Hassan said that Iraq has "kept the other contracts with international firms" from the first term "and will submit them to the UN sanctions committee for approval". Among its first-term clients were Mobil, Texaco and Chevron of the United States, Elf Aquitaine and Total of France, the British-Dutch firm Royal Dutch Shell, British Petroleum, Russia's Lukoil, Agip of Italy, Repsol of Spain and Japan's Mitsubishi.

Mr Hassan told AFP on Saturday that Iraq is ready to clinch its first oil export contracts after the two-month suspension which was in protest at delays in UN approval of its food and medical contracts.

The previous day, a UN panel overseeing sanctions against Iraq approved a new pricing formula for Iraqi oil, allowing Baghdad once again to sign contracts with buyers.

"The first oil tankers are expected on Tuesday" to load Iraqi crude from the Gulf terminal of Mina al-Bakr and the Turkish terminal at Ceyhan on the Mediterranean sea, according to Mr Hassan.