President Saddam Husain's exercise in 20th century saber rattling to force Kuwait and the United Arab Emirates back into the Organization of Petroleum Exporting Countries' quota system is turning into something more serious and far more difficult to resolve.
In accusing Kuwait of aggression by illegally drilling wells in South Rumaila field, Iraq's president has renewed the long running-but largely forgotten-dispute over the boundary between the two countries.
AN UNOFFICIAL LINE
For years the two oil exporters have observed an unofficial border line set by the Arab League in an attempt to defuse tension over jurisdiction.
Iraq always has accepted the line reluctantly and has shown little interest in international arbitration to bring the dispute to an end.
Border disputes in the Middle East tend to be long and extremely complex largely because demarcation lines in the desert were of little relevance when many people in Arabia led nomadic lives and the oil lay undiscovered.
Oil has changed relaxed attitudes toward borders. A mile or two surrendered as part of a settlement could cost millions of dollars in future oil revenues.
Amid the lengthy rhetoric accusing Kuwait of participating in a U.S. plot to destabilize its bigger and more powerful neighbor, Iraq made specific allegations about border incursions by Kuwait.
As well as drilling in part of South Rumaila field, most of which lies in Iraqi territory, the Baghdad administration alleged that since the early 1980s Kuwait progressively encroached on Iraqi land, setting up oil production installations and following those with a variety of military installations and farms.
Ranged against a million man army, well equipped and seasoned from the war with Iran, Kuwait has been forced to rely on an intense diplomatic offensive rather than deploying its defense force of 20,000.
In a letter to the Arab League, Kuwait denied any aggression or encroachment and laid out its version of drilling in the border area.
Kuwait said exploration started long before Iraq's attention was distracted by the war with Iran. First wells were drilled in 1963, and after a break drilling resumed in 1976.
DEFENSE, COUNTERCHARGES
Kuwait also said it has produced oil only from within its territory, south of the Arab League line and far enough away from international borders to conform with international standards.
And it makes countercharges that Iraq has repeatedly tried and continues to try to drill wells in Kuwaiti territory despite Kuwaiti complaints and is causing severe damage to the part of South Rumaila that lies in Kuwait.
Old Kuwaiti hands in the industry dismiss Iraq's claims in much the same way as the Kuwaiti government has done. And there is certainly some skepticism about Iraq's claims for $2.5 billion compensation for oil that was taken "illegally" by Kuwait.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.
