Washington Bracing for A UN Fight Over C
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|Mon, 04-07-2003 - 3:22pm|
By Bernie Woodall
UNITED NATIONS -- The United States is expecting another fight in the United Nations with Russia and France over how to get Iraq's oil exports going again once the war is over, U.S. officials said Friday.
Deep divisions within the UN Security Council over how to run Iraq's oil business may force Washington to go it virtually alone again, as it did last month in launching war on Iraq without council approval, the officials warned.
But oil analysts, traders and UN diplomats said that strategy could backfire by undermining the post-war resumption of Iraqi oil sales.
"The question is, will the Bush administration, when faced with obstacles posed by the international community, try to ram decisions down the Security Council or ignore it and claim that the council is irrelevant," said Raad Alkadiri, an analyst for The Petroleum Finance Co. in Washington. "Past experience suggests it will start with one of those techniques. The legality of selling oil -- that is the next big question."
Under international law, a country's resources belong to its people, raising questions about the power of a military government such as that contemplated by Washington to exploit Iraq's oil, even if the money went to reconstruction, as the United States has pledged.
Big oil companies may simply steer clear of Iraq crude exported without UN approval, one oil industry trader said.
"Some companies, and this includes major U.S. oil companies, may not want to touch Iraqi oil because of all the legal questions," this trader said. "The lawyers in these companies may say they are not sure they are not buying stolen oil."
"It has to be clear that the company who buys this oil has indisputable title to the oil," the trader said. "There are a lot of complications if the United Nations does not get involved."
Washington, still smoldering over the fierce opposition from Russia and France to U.S.-British efforts to get Security Council authorization for invading Iraq, said they expected Russia to be the most difficult council member to win to their side on the oil questions. As permanent council members, Russia as well as France, the United States, Britain and China all have veto power.
Russian oil companies have in the past often bought the lion's share of Iraq's crude exports. They have also been earmarked for lucrative post-sanctions exploration and production contracts, and Moscow is owed billions of dollars by Baghdad.
"You're going to have the Department of Defense effectively occupying most of Iraq's oil fields. You'd think that the French and the Russians would recognize that fact and come with inducements for the U.S. to continue to work within the Security Council," said one U.S. official who asked not to be named.
Iraq's oil exports have been governed since 1996 by the UN oil-for-food program, but crude exports have been at a standstill since the early days of the conflict. The 15-nation council just renewed the program for 45 days late last month as a stopgap measure.