UN Security Council unanimously adopts Iraqi resolution

The United Nations Security Council Tuesday unanimously adopted a resolution that asserts the Iraqi people are free "to determine their own political future and control their own natural resources," including oil.

June 9, 2004

2 min read

Maureen Lorenzetti
Washington Editor

WASHINGTON, DC, June 9 -- The United Nations Security Council Tuesday unanimously adopted a resolution that asserts the Iraqi people are free "to determine their own political future and control their own natural resources," including oil.

The UN resolution calls for the interim government to control the Development Fund for Iraq, an account set up by the US and the UN in which money generated from oil and gas exports—along with frozen assets from the regime of deposed President Saddam Hussein&151;is deposited. The International Advisory and Monitoring Board (IAMB) will still audit the account to make sure funds are being spent judiciously, an action applauded by human rights groups. IAMB's authority will expire after elections are held, now expected before 2006.

"This resolution makes clear that Iraq's sovereignty will be undiluted and that the government of Iraq will have the sovereign authority to request and to decline assistance, including in the security sector," said US Ambassador to the United Nations John Negroponte.

Iraq's new Prime Minister Iyad Allawi Tuesday said his interim government now controls the country's oil sector even though the US does not formally transfer power to Iraq until June 30. Oil exports are expected to remain a crucial cash stream for the new government; oil revenues are likely to be at least $14 billion this year, according to US government estimates.

Longer term, the country could attract serious industry investment. But that all will depend on how long it takes elected leaders to fashion regulations that spell out how foreign companies can further develop the country's vast potential reserves. There is no consensus on what that timetable will be. Some analysts predict it could be as soon as 2 years, while others foresee things taking a decade or even longer.

Meanwhile, what is in place right now is still working—albeit very inefficiently—by most industry standards because there is so much outdated equipment that needs replacing, both upstream and downstream.

Along with a chronic shortage of spare parts, sabotage remains an ongoing issue although it is not the huge obstacle originally feared to be; even with frequent disruptions oil workers have managed to keep exports fairly constant.

For example, rebels bombed a northern oil pipeline Wednesday, which forced authorities to compensate by making a 10% cut to the power grid. Exports however, were only slightly affected.

Contact Maureen Lorenzetti at [email protected].