The UN Security Council looms large in any plans for the development of Iraq's petroleum industry and the sale of its oil, despite the appointment by the US of three executives to run that industry for the immediate future.
Thamir Ghadhban, named by the US as interim head of Iraq's Ministry of Oil, said a plan would be presented soon to establish oil production targets for 2-3 months. He said the plan would concentrate on the domestic market, while exports await a "political" decision.
"We are concentrating on the domestic parts of the Iraqi oil industry. We are not concentrating on the export side. These are matters to be decided later," said Ghadhban.
He will direct an interim management team overseeing daily management responsibility for the country's oil industry, oil sales, and marketing operations.
The management team will work with an American-led advisory board, headed by oil veteran Philip J. Carroll, who will act as its chairman. Fadhel Othman, a former head of Iraq's State Oil Marketing Organization (SOMO), will serve as the board's vice-chairman.
The board also will include foreign and Iraqi expatriate oil experts, yet to be named. But the legal status of Iraqi oil sales still remains uncertain.
UN role
The UN, which monitors Iraqi oil sales under the "oil-for-aid" program, has said it needs a competent authority in Iraq to sign and certify exports before sales can resume. The question is whether a team appointed by the US will meet the legitimacy test.
"The UN would have problems to operate the oil-for-food [program] when somebody [including Ghadhban] pops up and says, 'I'm SOMO.' If the UN agrees, then that's fine. But I don't see that happening easily," a UN source said.
Meanwhile, a UN diplomat said that, "Clearly, the legal route is the UN route to lift or suspend sanctions." But it's "still too early" to say whether the US will meet the same resistance in the Security Council as it did earlier this year when seeking council authorization to invade Iraq, he added.
The Security Council has the authority to oversee Iraq's crude oil sales under terms of the oil-for-aid program, which allowed humanitarian aid to enter the country while maintaining the UN sanctions against Iraq.
The oil-for-aid program ends June 3, but the US and UK are expected to produce a draft resolution to lift sanctions against Iraq, automatically ending any extension of the oil-for-aid program or any need for UN oversight of the country's oil wealth.
The Security Council is expected to discuss the proposals about the oil-for-aid program during meetings on May 12 and 29. Considerable behind-the-scenes lobbying is expected in the meantime.
Although UN Sec. Gen. Kofi Annan has called for sanctions to be lifted, the Security Council remains split on how much freedom that the US should be given to establish a civilian government and, above all, to manage Iraqi oil.
Future contracts
With the US-led coalition now deciding who will run Iraq's ministry of oil, speculation abounds that US and UK oil firms will have priority over French and Russian companies in securing lucrative contracts.
UK diplomats and US are expected to introduce a resolution that would end the sanctions regime and recognize the US-led reconstruction of Iraq. Meanwhile, France, Germany, and Russia want to protect their own oil interests by extending UN monitoring.
Russian Premier Vladimir Putin said, "Amid the current anarchy in Iraq, the oil-for-aid program must be implemented under strict UN control."
While agreeing in principle that UN sanctions against Iraq should be lifted, France, Germany, and Russia insist that the sanctions removal depend on UN certification that Iraq is free of weapons of mass destruction.
Putin proposed sending UN inspectors to Iraq to conduct "independent inspections under the protection of blue helmets."
"Instead of showing various kinds of empty barrels on television, UN inspectors must be immediately summoned to the place where they have been found, as it is only they who can make an expert assessment," Putin said.
Hans Blix, the chief UN weapons inspector, has suggested sending back UN inspectors to lend credibility to the search. But the US and UK have said it is not yet time to discuss the return of the inspectors, a point underscored by US Undersec. of State John Bolton on a recent visit to Moscow.
"I don't think there is any role for the UN in the short term in searching for, or identifying, or securing weapons of mass destruction, but we do not necessarily rule out some kind of UN role down the road," Bolton said. "That's a question that remains to be decided," he added.
The US and UK are pursuing investigations on their own, largely based on interviews with Iraqi scientists connected with the weapons program. This is a process that could be time-consuming, according to British foreign secretary Jack Straw.
"Assembling an accurate picture of Saddam's programs will take time," Straw said, explaining that "Until we are able to question the scientists and experts who worked on these programs—and the UN has a list of 5,000 names—progress will inevitably be slow."
Meanwhile, according to Ghadhban, Iraqi oil production is set to rise "within weeks" to 1.5 million b/d from the current 235,000 b/d—enough to meet Iraq's domestic needs of around 500,000 b/d, leaving 1 million b/d to export. But absent a decision from the UNSC on export sales, Ghadhban says, any surplus will be diverted to tank farms.
Depending on how long the UNSC impasse lasts, that surplus could become substantial—especially when added to the 9.3 million bbl of Iraqi crude oil already held in storage at the Turkish port of Ceyhan.
