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From the news: Iraq and OPEC

Associated Press: UAE: Include Iraq in OPEC Decision 
Sunday, February 7, 1999; 6:48 p.m. EST

ABU DHABI, United Arab Emirates (AP) -- Iraq should be part of any
``serious'' future agreement by the Organization of the Petroleum
Exporting Countries to further cut output, United Arab Emirates Oil
Minister Obaid bin Saif Al-Nasseri said late Sunday. ``There is no point
in having an agreement while Iraq is making up for the quantity that has
been agreed to be cut or lifted from the market,'' the minister said in
an interview with Dow Jones Newswires following talks with visiting U.S.
Energy Secretary Bill Richardson. Ministers of the Organization of
Petroleum Exporting Countries are expected to meet on March 23 to
discuss oil prices, which have plummeted to near-record lows because of
an oil supply glut. Iraq, however, is unlikely to agree to any cuts.
Iraq was exempted from the 2.6 million barrels a day in OPEC production
cuts agreed to by the other 10 OPEC members in 1998 because its
production levels are controlled by the United Nations' through the
U.N.-Iraq oil-for-food deal. Last year, the United Nations boosted
Iraq's allowed oil sales to $5.2 billion every six months from $2
billion every six months. 

Iraq is now pumping at its maximum capacity of 2.5 million barrels a day
and is looking to buy spare parts for its dilapidated oil industry to
boost production. With oil prices hovering between $11-$12 a barrel,
however, Iraq is only earning about $3 billion every six months from oil
sales. When asked whether he thought Iraq would agree to cut oil
production -- when oil sales are the only funds it gets under sanctions
for humanitarian aid for its people -- Nasseri said ``to agree or not to
agree is their decision.'' Iraq has said it desperately needs the oil
revenues and has called on Saudi Arabia, OPEC's largest producer, to cut
its production. After Iraq was banned from exporting oil, Saudi Arabia
took over most of its pre-1990 OPEC daily quota of about 3 million
barrels. Saudi Arabia has refused to relinquish the additional
production capacity even though Iraq has resumed exporting oil.

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