OIL ISSUE: A "battle is raging" within the Bush administration about the management of Iraq's oil supplies immediately after of the war, according to coalition diplomatic sources at the United Nations. Conor O'Clery, in New York
The outcome is being closely watched by Russia, France and other Security Council countries which want the oil industry to operate under UN management until a new internationally acceptable Iraqi authority is in place.
However the US Defence Department is reported to be pressing ahead with plans to establish an American oil executive to manage temporarily Iraq's oil industry, against strong opposition from the State Department, Britain and the UN.
The US Secretary of State, Mr Colin Powell, said in Brussels yesterday after meeting EU and NATO officials that the UN "has a role to play as a partner" in post- war Iraq. "The work of reconstruction will require the whole international community working together," he said, while admitting "there is no consensus yet".
The US-led forces took on the mission and its costs in revenue and lives and "has to play the leading role in determining the way forward, but that does not mean we will shut others out".
Mr Powell is keen to have a UN presence in Iraq as soon as possible to allay anger among US allies about the war and suspicions over Washington's motives concerning oil. The nature of that role will be the topic of intense diplomacy at the Security Council in the days ahead, though all sides are waiting for the fighting to end before tabling any resolutions.
Under current UN sanctions against Iraq, the UN operates an oil-for-food programme which allows the export of more than 2 million gallons of oil a day to provide funds which supply essential aid for 80 per cent of Iraqis.
The scheme is suspended because of the war, but the council has voted to give the UN Secretary General, Mr Kofi Annan, authority to run it until June 3rd, when it can be "rolled over" again.
UN officials say a new Security Council resolution is needed to give the US the legal authority to export oil while a new authority is being set up in the ruins of Baghdad. Doing anything without a new resolution is "not an option", agreed a diplomat from a US-led coalition country, and indeed nothing could be done in any economic sphere concerning Iraq until sanctions are suspended.
The management of the oil cannot be handed over to an interim Iraqi authority or anyone else without a new resolution and "control of one country is not going to be handed over to another country," the diplomat said.
The White House has said all along it will use Iraqi oil to pay for reconstruction and intends to instal a senior American oil executive to oversee Iraq's temporary exploration and production, according to the Washington Post, which names former Shell Oil c.e.o. Mr Philip Carroll as leading candidate.
Pentagon officials argue that as the occupying power, the US would have a legal right to sell the oil for the benefit of the Iraqi people.
The president of the Security Council, Mr Adolfo Aguilar Zinser of Mexico, said the council must make an effort to preserve Iraqi sovereignty over oil. France and Russia have made it clear they want the council to establish how oil revenues are spent.
Diplomats say there are roles for the US, the UN and an Iraqi transitional authority in post-war Iraq but the relationship among the three has not been established.
The Pentagon and the State Department are also divided on the composition of a interim authority. The Defence Department favours meeting the demand of Ahmad Chalabi, head of the exile-led Iraqi National Congress, for a leading role in the new authority, but the State Department would prefer a lesser role for Mr Chalabi because of his divisive potential.