WATCHING THE WORLD IRAQI GULF EXPORTS

With Roger Vielvoye from London Reopening Iraq's war ravaged oil export terminal at the head of the Persian Gulf is again on the agenda in Baghdad. Although the main tanker export outlet, Mina al-Bakr, was badly damaged by allied bombing raids during the Persian Gulf war, the Iraqi administration insists prospects for resuming exports through the gulf be seriously investigated.

Oct. 21, 1991

3 min read

Reopening Iraq's war ravaged oil export terminal at the head of the Persian Gulf is again on the agenda in Baghdad.

Although the main tanker export outlet, Mina al-Bakr, was badly damaged by allied bombing raids during the Persian Gulf war, the Iraqi administration insists prospects for resuming exports through the gulf be seriously investigated.

Looking eastward to the gulf is a knee jerk reaction to the recent Turkish demand for transit fees and charges for restarting the crude oil export line from the northern Iraqi oil fields to the tanker and storage terminal at Ceyhan on Turkey's Mediterranean coast (OGJ, Oct. 14, p. 31).

The Turkish demand for $264 million in a single payment-regardless of how much oil is pumped through the line into Turkey-has generated considerable anger in Baghdad's state controlled media.

IRAQ'S GULF EXPORT DILEMMA

However, ordering the state marketing authority SOMO to switch its marketing efforts from the Mediterranean to the gulf is one thing. Repairing and reopening the terminals to international tanker traffic is another.

Mina al-Bakr was badly damaged by the Iranians in the early days of the Iran/Iraq war and had only just been rebuilt and reopened to tanker traffic when Iraq invaded Kuwait.

Damage to the export facilities by allied bombers was far more extensive than anything inflicted by the Iranians. A second reconstruction would certainly require the help of foreign companies currently excluded from working in Iraq.

Even if the Iraqis could rig some kind of temporary facility for exports from the gulf, they still would face the problem of United Nations resolutions on resuming crude exports, which specifically name Ceyhan as the required outlet for the initial $1.6 billion worth of oil to be sold.

There was one item of better news for the Iraqis. Turkey's $264 million transportation charge will not be taken from the U.N. escrow account along with war reparations and operating expenses and therefore won't eat into the remaining revenues available for purchasing foods and medicines.

The chairman of the U.N. sanctions committee, Peter Hohenfellner, Austria's ambassador to the U.N., said negotiations over transit fees were not the concern of the committee, which would consider allowing more oil to be pumped to cover these costs.

MONITORING IRAQI OIL SALES

Hohenfellner said the U.N. now had an established framework under which oil sales would be conducted and monitored and Iraq could begin exporting crude almost immediately.

This will require Saddam Hussein to accept the U.N. conditions, particularly the strict monitoring of export operations. So far the only indications from Baghdad are anger at the Turks and the call for reopening the gulf export terminals. However, the need for food and medicine may bring a sudden change of heart from Iraq.

Monitoring operations will be conducted by a team of 10 Norwegians from the Norwegian state company Den norske stats oljeselskap AS and Saga Petroleum AS.

The Norwegians will man a 24 hr/day bureau in New York that will approve or reject sales contracts. They also will work with SOMO to ensure contracts meet U.N. rules and be responsible for monitoring and metering exports.