News for period 29 Nov to 5 Dec, 1999

[Nathan Geffen <ngeffen@DELETETHISyahoo.com>]

News for period 29 November to 5 December, 1999

Thank you to Ben Rempel for his contributions this
week.

Sources: Yahoo, AP, Reuters, www.arabicnews.com,
Kurdish Media, Alabamha Headlines (?). 

* The Security Council voted to extend Oil-for-Food
(OFF) for 1 week. Four countries, France, China,
Russia and Malaysia abstained. France's abstention is
unusual and seems to indicate a serious disagreement
with the US. Iraq also pressurised the French not to
vote for the resolution.

* Iraq and the Arab league condemn one-week OFF
extension.

* There is continued coverage of Iraq's reduction of
its oil supplies in protest against the short OFF
extensions. Oil prices have been highly volatile
during the last couple of weeks.

* "Thousands of Iraqis held special prayers for rain
Thursday after a year of drought that decimated cattle
and crops."

* University of Texas Medical Center apparently makes
some progress in Gulf Syndrome research.

* Some statistics on Iraq's oil supplies appear in the
last article.

A couple of requests: 

1. Will someone please keep an eye out for interesting
reports on www.arabicnews.com. Unfortunately, the
site's search engine does not work and it seems
impossible to get news that's older than a day. Please
email the unchanged text of interesting articles to
me. Unfortunately, I don't have the time to examine
the site everyday.

2. I would appreciate feedback on how this weekly
posting can be improved. E.g. Is it too long? Too
short? Not enough sources? Formatting suggestions?
etc. Please email me directly in this regard, not the
discussion list.

-------------------------

Sunday December 5 5:37 PM ET 
Report: Iraq-France Ties To End
By LEON BARKHO Associated Press Writer 
BAGHDAD, Iraq (AP) - France will lose all of its trade
benefits with Iraq, including lucrative oil
development deals, if it votes in favor of a U.N.
resolution backed by the Unawwited States, Iraq's most
influential newspaper said Sunday. 
The warning in Babel, the daily newspaper owned by
President Saddam Hussein's eldest son, Odai, singled
out French oil giants Elf Aquitaine and Total, which
are nearing completion on deals for the development of
two large oil fields. 
If the resolution is passed, ``logic says that both
Elf and Total will have to close their offices in
Baghdad and leave. That means they will lose the huge
oil investment opportunities they have been granted,''
Babel said in a front page editorial signed by
Abdulrazzaq al-Hashimi, a senior member of the ruling
Baath party and former ambassador to France. 
Iraq also ``will put an end to the preferential
treatment given to French companies,'' it said. 
Russia and China - Iraq's closest allies among the
five permanent Security Council members - as well as
France have favored suspending sanctions soon after
Iraq allows U.N. weapons inspectors to return. But the
United States and Britain demand a longer waiting
period and Iraqi answers to disarmament questions. 
Attempts to reach a compromise have dragged on nearly
a year, but a vote appears to be drawing near. 
Babel did not say whether Iraq would punish its other
two major trading partners - Russia and China - if
they agreed to the proposal. Both have signed deals to
develop oil fields in Iraq. 
Later Sunday, Saddam met with several members of
Iraq's highest legislative body - the Revolutionary
Command Council - to discuss the U.N. resolution. 
``The meeting stressed Iraq's rejection of the evil
British draft resolution and Iraq's position not to
deal with any formula that does not contain the
comprehensive and unconditional lifting of the
sanctions,'' the official Iraqi News Agency said. 
The United States is pressing U.N. Security Council
members to reach agreement on the proposed resolution,
which charts a new policy toward Iraq that would
restart U.N. weapons inspections as well as upgrade
the humanitarian program in the country. 
U.N. arms inspectors left Iraq almost a year ago on
the eve of U.S.-British airstrikes. The government had
vowed not to let them return. Nizar Hamdoun, a deputy
foreign minister, said Saturday that Iraq would only
allow the inspectors back if U.N. sanctions imposed
after Iraq's 1990 invasion of Kuwait were abolished. 
France is among Iraq's major trading partners under
the U.N.-approved oil program, which permits oil sales
worth $5.2 billion every six months despite the
sanctions. French exports to Iraq were estimated at a
half-billion dollars during each the past two phases
of the program. 
--------------------------------------------
Sunday December 5, 2:24 pm Eastern Time 
Iraq's Main Oil Center Back on Line
By LEON BARKHO 
Associated Press Writer 
KIRKUK, Iraq (AP) -- Iraq's biggest oil center is
going full bore again despite the hindrance of U.N.
trade sanctions and the need to repair extensive
damage from the 1980-1988 war with Iran and the 1991
Gulf War. 
The boost in production from the aging wells around
Kirkuk, l85 miles north of Baghdad, is helping Iraq
earn badly needed hard currency to buy food and
medicine for its citizens and spare parts for its oil
industry. 
Sanctions imposed by the United Nations after Iraq's
1990 invasion of Kuwait have crippled the economy,
hitting ordinary Iraqis hard, but U.N. rules allow oil
to be sold to buy necessities for ordinary people. 
For the first time since sanctions were imposed a
decade ago, Kirkuk's wells are producing at their
previous capacity of 900,000 barrels a day, says Adil
al-Qazzaz, deputy chairman of Iraq's Northern Oil Co. 
He says there are plans to drill 100 new wells next
year and add an additional 200,000 barrels to daily
output. 
That would maintain Kirkuk's key role in the Iraqi oil
industry, accounting for more than a third of the 3
million barrels a day Iraq wants to export by the end
of 2000. 
Just two years ago, Kirkuk was at its lowest point,
with daily output of just 700,000 barrels of
low-quality crude. Officials blamed lack of processing
chemicals, spare parts and equipment. 
But the arrival of hundreds of millions of dollars in
equipment and spare parts bought under the
U.N.-monitored oil export program let work crews lay
new pipelines and replace aging and dilapidated
machinery. 
Independent oil analysts in the West are skeptical of
Iraq's plans for the Kirkuk field, saying they believe
it is on an irreversible decline. 
Leo Drollas, chief economist for the London-based
Center for Global Studies, predicts Kirkuk's oil
reserves will be depleted in 20 years and says output
could soon plunge to 600,000 barrels a day. 
Iraqi experts dispute that. They estimate up to 10
billion barrels are still to be recovered from Kirkuk,
which Al-Qazzaz says should yield oil for at least 70
more years at the current rate of production. 
But the Iraqis also acknowledge that billions of
dollars of investment will be needed in the field. 
Kirkuk has been pumping oil for seven decades. On Oct.
14, 1927, a column of oil sprayed so high from the
first Kirkuk well that it could be seen from several
miles away, according to industry lore. 
The gusher was the start of the transformation of
Iraq's economy from agriculture-based to one powered
by crude. 
Iraq's proven oil reserves are the world's largest
after those of Saudi Arabia. 
The U.N. sanctions generally keep Iraq from earning
hard currency. But the U.N.-monitored ``oil-for-food''
program lets Iraq export up to $5.2 billion of oil
every six months, with the proceeds used to buy food
and medicine for ordinary Iraqis and equipment for the
oil industry. 
Producing oil worth about $25 million a day, the
Kirkuk field is a key asset of President Saddam
Hussein's government. Troops ring Kirkuk's 95 square
miles of wells to ward off the region's rebellious
Kurds, who temporarily occupied the field during a
failed uprising after the Gulf War. 
-------------------------------------------------
Arab League criticizes renewal of oil-for-food
agreement for one week 
www.arabicnews.com
The Arab League criticized today a resolution by the
United Nations Security Council to extend the Iraqi
oil-for-food program for one week.
Iraq, Politics, 12/4/99

-------------------------------------------------
Saturday December 4 9:15 PM ET 
Iraq Wants U.N. Sanctions Decision
By AHMAD SAMI Associated Press Writer 
BAGHDAD, Iraq (AP) - The U.N. Security Council must
choose between trade sanctions on Iraq and disarmament
inspections, the deputy foreign minister said
Saturday. 
``We have always said that we cannot take both the
sanctions and the inspectors ... one of them will have
to go,'' Nizar Hamdoon told Associated Press
Television News. 
``Without removing the sanctions entirely, it is
impossible for us to deal with any inspection
activity,'' said Hamdoon, who is the previous Iraqi
ambassador to the United Nations. 
His remarks came as the United States pressed U.N.
Security Council members to reach agreement on a new
policy toward Iraq that would restart U.N. disarmament
inspections as well as upgrade the humanitarian
program in the country. 
U.N. arms inspectors left Iraq almost a year ago on
the eve of U.S.-British airstrikes. The government had
vowed not to let them return. But Hamdoon made clear
that Iraq would allow the inspectors back if the
sanctions were abolished. The sanctions have been in
force since Iraqi forces invaded Kuwait in 1990. 
Hamdoon urged France, a permanent member of the
council, to veto a British-Dutch draft resolution that
links a partial suspension of the sanctions to the
resumption of disarmament inspections. 
Iraqi state-run newspapers have recently criticized
France severely, accusing it of leaning toward the
U.S.-British position on Iraq in the Security Council.

But Hamdoon said France was still a friendly country
and had a duty ``to try and stop (the draft
resolution) from being passed. This resolution is bad.
We think it is going to lead to further crises.'' 
Iraq's relations with council members are currently
poor following the world body's decision to extend the
U.N. oil-for-food program for only two weeks last
month and for one week on Friday. U.S. diplomats
argued in favor of the short extensions in order to
encourage the council to reach agreement on a
comprehensive package on Iraq. The program, which
allows Iraq to bypass sanctions and sell oil to buy
food and humanitarian goods, is normally extended in
six-month stages. 
Hamdoon said the short extensions were a U.S. attempt
to ``apply pressure on council members to try to make
them move on the British draft resolution, which is a
very bad one.'' 
France, in a rare move, refused to take part in the
council's vote on a one-week extension on Friday.
Russia, China and Malaysia abstained and 11 members
voted in favor. 
Also Saturday, Iraqi Oil Minister Amer Mohammed Rashid
said the extension ``is a political mockery. It is
meaningless (and) totally impractical.'' 
He made the comments in Cairo, following a meeting of
Arab oil ministers. 
Asked when Iraq would return to the market, Rashid
said: ``We will wait and see. We cannot predict what
will result from the Security Council meetings.'' 
--------------------------------------------------
Friday December 3, 10:48 pm Eastern Time 
Iraq's return to oil market several weeks away
By Bernie Woodall 
UNITED NATIONS, Dec 3 (Reuters) - Iraq's return to the
world oil market is at least two weeks away, and that
is a favourable assessment contingent on a six-month
renewal of the programme by next week, U.N. diplomats
and officials said on Friday. 
A divided Security Council Friday extended through
December 11 the ``oil-for-food'' programme that allows
Iraq to sell oil outside of U.N. sanctions. 
Whether the Security Council is able to approve
another six months of oil sales by December 11 is
closely linked to sticky negotiations on the so-called
``omnibus'' or ``comprehensive'' resolution on wider
Iraq policy. 
A Western diplomat said Friday that if the United
States is correct in its assessment that the omnibus
resolution will pass next week, a six-month renewal --
Phase 7 -- of the oil programme with no sales cap
would be implemented immediately. 
Iraq has said it will reject an omnibus resolution.
But the diplomat said that even if Iraq rejected a
council-approved omnibus resolution, elimination of
the sales cap and additional spending for Iraq's oil
industry would still be included in the next six-month
tranche of the programme. 
VOTE WANTED NEXT WEEK, BUT OPTIONS AVAILABLE 
Peter Burleigh, the U.S. deputy U.N. representative,
on Friday linked adoption of the comprehensive
resolution to a six-month renewal of the oil-for-food
programme ``a week from now.'' 
The comprehensive resolution ``needs to be in place
before we turn our attention to authorising a full
Phase 7 of oil-for-food,'' Burleigh said during
Friday's council session. 
But another western diplomat said that there were a
number of alternatives available if a comprehensive
resolution is not approved next week. 
Among the options, he said, was a six-month rollover
of the oil-for-food programme similar to a measure
attempted in mid-November by the United States that
would keep the programme largely unchanged. Currently,
Iraq is allowed to export up to $5.26 billion of oil
every six months with about two-thirds of the proceeds
funding humanitarian supplies for needy Iraqis. 
Another option if no omnibus resolution is passed is
for another short-term extension, but several Western
diplomats said it was clear at Friday's devisive
council session that support for another short-term
extension is wearing thin. 
DELAY IN EXPORTS 
Saeed Hasan, Iraq's ambassador to the U.N., said Iraq
would not begin the preliminary work necessary to ship
oil -- signing contracts with oil companies,
submitting a monthly pricing plan to the United
Nations, and ramping up production -- until after the
Security Council approves a full six-month phase of
the programme. 
Hasan said this means that Iraq would not begin
shipping oil until at least two weeks after any
Security Council vote to extend the programme for six
months. 
A U.N. official on Friday said short delays to Iraqi
oil exports at the beginning of every six-month sales
phase were common. He said that in the past, shipments
from Ceyhan in Turkey had begun three to five days
after Iraq agrees to ship oil and five to 10 days for
the first shipments from Mina al-Bakr, Iraq. 
Before it suspended oil exports on November 24, Iraq
was averaging exports of about 2.3 million barrels per
day (bpd). This represents about three percent of the
world's daily oil consumption. 
---------------------------------------------------------
Friday December 3 5:39 PM ET 
U.N. Approves Iraq Aid Extension
By EDITH M. LEDERER Associated Press Writer 
UNITED NATIONS (AP) - The U.N. Security Council
narrowly approved a U.S. resolution Friday to extend
the oil-for-food humanitarian program in Iraq for one
week, with France refusing to vote in protest and
three other countries abstaining. 
The vote reflected the continuing divisions in the
Securit
proved by 11 countries. The resolution needed
nine votes for approval. 
U.S. officials said the one-week extension will
maintain pressure on the Security Council to adopt a
comprehensive resolution on Iraq that would enhance
the oil-for-food program and return U.N. weapons
inspectors. 
But the U.S. proposal angered Iraq, which favors a
simple six-month renewal of the program, as well as
its supporters in the Security Council, including
France, which tried but failed to broker a compromise
one-month extension. 
France's U.N. Ambassador Alain Dejammet and Malaysia's
U.N. Ambassador Agam Hasmy said the one-week extension
was too short and impossible to implement. Russia,
China and Gabon also spoke in support of the French
position, diplomats said. 
The U.N. oil-for-food operation allows Baghdad to sell
$5.2 billion in oil over six months to buy food and
medicine for Iraqis who have been under strict
sanctions since Baghdad's 1990 invasion of Kuwait. 
The United States and Britain have been spearheading
talks with the other veto-wielding council members -
France, Russia and China - to reach agreement on a
comprehensive Iraq resolution which would incorporate
the humanitarian program. They had hoped to reach
agreement before the last six-month phase of the
oil-for-food program ended on Nov. 20, but failed. 
So the council voted for a two-week extension and Iraq
responded by shutting off oil exports. With that
extension expiring Saturday night, and no agreement on
a comprehensive resolution, the council was faced with
the prospect of another extension. 
U.S. and British officials believe agreement is near
on an omnibus resolution - and a week can clinch it. 
In Washington, State Department spokesman James P.
Rubin said, ``We still have big problems, but some
procedural progress has been made.'' 
Hasmy, the Malaysian ambassador, said the brief
extension was intended primarily to exert pressure on
some permanent council members. 
While he didn't identify any countries, Russia has
been Iraq's most outspoken supporter on the council,
and Russia and China remain at odds with the United
States and Britain over key provisions of a
comprehensive resolution. 
Russia and China favor suspending sanctions soon after
Iraq allows U.N. weapons inspectors to return and
demonstrates compliance with them. But the United
States and Britain demand a longer waiting period and
Iraqi answers to outstanding questions about its
disarmament. 
``We feel there's too much of a hurry, artificial
deadlines being exerted,'' said Hasmy, noting that the
10 non-permanent council members have only seen ``bits
and pieces'' of the omnibus resolution. ``We don't
feel that we're taken seriously.'' 
Iraq's U.N. Ambassador Saeed Hasan said Baghdad won't
restart oil exports if the council votes for a
weeklong extension on Friday. 
Iraq objects to using the humanitarian program ``as
leverage on Security Council members to pass their
omnibus resolution, which will be rejected certainly
by Iraq,'' he said. 
-------------------------------------------------
Friday December 3 2:53 PM ET 
U.S. Hopeful of Iraq Inspections
By BARRY SCHWEID AP Diplomatic Writer 
WASHINGTON (AP) - The Clinton administration claimed
some progress on a U.S.-led move to return
international weapons inspectors to Iraq. 
``We still have big problems, but some procedural
progress has been made,'' State Department spokesman
James P. Rubin said Friday. 
Russia, China and France all have resisted in varying
degrees a plan pushed by the United States and Britain
to pressure Iraq into complying with U.N. arms
inspections that were halted last December. 
While administration officials said Russia had not
agreed to the plan, Rubin said Foreign Minister Igor
Ivanov agreed in a telephone conversation with
Secretary of State Madeleine Albright to send Russia's
U.N. ambassador, Sergey Lavrov, back to New York. 
There he will hold detailed talks with Peter Burleigh,
the deputy U.S. ambassador, and other American
diplomats, Rubin said. 
In the meantime, facing a Saturday deadline, the U.N.
Security Council is divided over whether to extend a
humanitarian program in Iraq for a week or the
customary six months. 
The United States is pushing for a one-week extension
because it believes the council is close to agreement
on a new overall policy toward Iraq that would restart
U.N. weapons inspections there. A brief extension
would maintain pressure and momentum for an agreement
and hopefully lead to a vote next week, U.S. officials
said. 
The program permits Iraq to sell oil provided the
proceeds are used to purchase food and medicine for
the Iraqi people. Iraq cut all oil exports Nov. 22
when the council refused to extend the program
automatically for six months. 
Iraqi Ambassador Saeed Hasan has said Iraq would not
return to the market if the council accepted the
``ridiculous, senseless'' U.S. proposal for a one-week
extension. 
The U.N. oil-for-food humanitarian operation allows
Iraq to sell $5.2 billion in oil over six months to
buy food and medicine for Iraqis who have been under
strict sanctions since Baghdad's 1990 invasion of
Kuwait. 
Rubin described Albright's telephone conversation
Friday with Ivanov as ``very good and constructive''
and said she also had talked to British Foreign
Secretary Robin Cook and French Foreign Minister
Hubert Vedrine. 
Albright and Ivanov agreed they would consult
extensively by telephone over the next week, he said.
Albright will spend most of the week in the Middle
East. 
``We would expect those consultations to intensify in
the coming week,'' Rubin said. ``We certainly believe
that the time has come to move quickly to a vote, and
that we should move to a vote very, very, very soon.''
However, he also said, ``We have not made a specific
decision on any specific day that we intend to call
for a vote.'' 
-----------------------------------------
Friday December 3 11:00 AM ET 
France Says Week Too Short for Iraq Oil Deal
By Catherine Bremer 
PARIS (Reuters) - France said it would oppose a U.S.
proposal due to be put to a U.N. Security Council vote
Friday to prolong Iraq's oil-for-food program by just
one week, and will push instead for a longer
extension. 
``For us, seven days is insufficient for technical
reasons. We need a more substantial period to allow
Iraq to export its oil,'' Foreign Ministry spokeswoman
Anne Gazeau-Secret told a news briefing. 
``We are in favor of the usual six-month extension.
Between one week and six months, there may be a
compromise.'' 
Iraq has already said it will reject any week-long
extension, which would follow on from a two-week
extension of the program that expired Saturday. 
Oil markets were jittery ahead of the Security Council
decision with fears that more disruption to Iraqi oil
exports could bump up prices, especially coming at a
time of high seasonal demand in the West. 
The humanitarian food-for-oil deal, under which Iraq
has sold up to 2.4 million barrels of crude a day, has
always worked in phases of six months, each one being
rolled over on expiry. 
The U.S. proposal, which Iraq's oil minister Amir
Muhammed Rasheed has denounced as ``evil,'' is seen as
a bid to pressure the U.N. to vote on a comprehensive
resolution to extend the oil-for-food deal and let
U.N. arms inspectors back into Iraq. 
France Wants A Workable Consensus 
France backed those pushing for a solution this month
but was more concerned with reaching a workable
consensus than forging a speedy deal, Gazeau-Secret
said. 
``We stand by the resolution...but it must be adopted
by consensus so that it doesn't remain just a
principle, but can be put into practice,'' she said. 
``We are trying to find a complete, global solution
which at the same time reestablishes control of
disarmament and achieves suspension of sanctions.'' 
The United States and Britain have piled pressure on
Russia to accept the resolution, which seeks Iraq's
compliance with a new disarmament regime in return for
suspending sanctions on civilian goods. 
Paris originally appeared to side with Russia in
seeking more enhanced terms but had been felt recently
to be moving closer to the British and U.S. view. 
Gazeau-Secret said talks had reached an ``active
discussion phase'' and Foreign Minister Hubert Vedrine
was frequently on the telephone to his U.S., British
and Russian counterparts. 
However, she could not give details of Iraqi Deputy
Prime Minister Tareq Aziz's last-ditch visit to Moscow
this week in a bid to enlist Russia's support in
getting the U.N. sanctions lifted without letting arms
inspectors back into Baghdad. 
Russia is an ally of Iraq and its biggest creditor,
with little chance of being repaid until the end of
sanctions in place since the end of the 1991 Gulf War.

Gazeau-Secret said that among the issues to be
tackled, the thorniest was the criteria under which
the five permanent Security Council members would
agree to suspend sanctions. 
-------------------------------------------------
Friday December 3, 9:25 am Eastern Time 
ANALYSIS-Iraq's oil shock poses OPEC winter test
By William Maclean 
LONDON, Dec 3 (Reuters) - Haunted by past mistakes,
OPEC exporters are terrified of jeopardising
high-flying oil prices as they seek to calm consumer
jitters about winter shortages. 
But as anxieties fester in the absence of Iraqi
exports, top producers have let it be known that if
push comes to shove, they won't let consumers freeze
and prices overheat. 
The tricky task for Saudi Arabia and others is to
soothe nervous customers like the United States
without bashing this year's triumphant bull run on the
futures markets, analysts say. 
``I am not the slighest bit surprised that they want
to tamp down an overheated market,'' said Sarah
Emerson of Energy Security Analysis Inc in Boston. 
``They don't want to see a U.S. economic slowdown and
they they want to continue to be seen as the standard
bearer for price stability.'' 
PRODUCERS' CHARM OFFENSIVE TO NERVOUS CUSTOMERS 
A senior OPEC delegate suggested this week that if a
lengthy oil shock occurred amid peak winter demand,
key suppliers could ride to the rescue by relaxing
supply curbs possibly even before their agreed
end-March expiry. 
That hint, the most explicit in a series by top
exporters to the United States, scared markets briefly
lower but won high praise from analysts alarmed by
rapidly tightening supply. 
``It was the correct thing to do. We've been saying
for months that OPEC should not exclude that option,''
said Leo Drollas of the Centre for Global Energy
Studies. 
``It was pragmatic. It was good public relations,''
argued Geoff Pyne, an OPEC-watcher at Standard Bank in
London. ``OPEC has got to use a softly softly approach
like this to defuse the market, while keeping its
options open.'' 
Pyne said top producers probably believe in private
they would have to raise output in March to replenish
desperately low stocks drained more quickly than
expected by Iraq's absence. 
``But they dare not yet say there will actually be an
output increase because if they did the market would
be sold off.'' 
The charm offensive launched last month by Saudi
Arabia, Venezuela and non-OPEC Mexico appears aimed in
part at dousing inflation fears in Washington at the
onset of a presidential election year, analysts say. 
The trio, the top three exporters to the economically-
buoyant U.S. and the architects of this year's tough
supply curbs, have fretted publicly about the danger
of price spikes to polish their credentials as
responsible global citizens. 
OIL PRICE CAN STOKE U.S. INFLATION 
Year-on-year changes in oil prices have a marked
impact on U.S. headline inflation and are nothing but
bad news in convalescent Asia. Some analysts estimate
that each 10 percent rise in oil prices adds about
0.25 pct to the consumer price index in the United
States, the world's largest energy market. 
Consumer fears heightened by OPEC's supply cuts were
given added urgency last month by Iraq's suspension of
exports amid a big power dispute over overall Gulf War
U.N. sanctions. 
The move by Iraq, among the top 10 oil suppliers to
the U.S., tightened an already imbalanced market and
underscored Western nerves about shortages amid
precautionary stockpiling in case of Y2K-related
industry shutdowns. 
``The thing that got Washington going was 'Has Saddam
hijacked our economy'? Are we now threatened with
higher oil prices again because of Saddam?''' said
Peter Gignoux, head of the energy desk at brokers
Salomon Smith Barney. 
``All of a sudden people were saying 'are we OK with
the SPR (the U.S. emergency Strategic Petroleum
Reserve) and the IEA (International Energy Agency). Do
we really have a problem?'.'' 
Prices gyrated this week when the senior OPEC delegate
made out a case for Saudi Arabia and other exporters
hiking output if tight fundamentals lit the fuse on a
prolonged price spike. 
CALMING CONSUMER FEARS SEEN AS PRUDENT 
Bulls and OPEC price hawks looked askance at mention
of a price that producers could use to gauge concern,
$25 for U.S. crude West Texas Intermediate -- just
below current levels. 
Producers like Iran and Kuwait are anxious that OPEC
not repeat the mistake it made at a Jakarta meeting in
late 1997 when it set higher output quotas and sparked
a price collapse. 
But analysts say that with supply so tight, another
collapse is now unlikely and the OPEC delegate's
argument is prudent. 
``It was the wise thing to do -- take some steam out
of the market with little danger of a collapse,'' said
Emerson. 
Kuwait has helped prop up prices by talk of possibly
extending the cuts after March. ``That to me is a
non-story,'' said Emerson. ``It's an arrogant effort
to try to spook the speculators. There's nothing to be
gained by that.'' 
---------------------------------------------
In Kirkuk - Iraq displaces Kurds while Russians
Drilling for Oil Kurdish Media - 
Dec 3, 1999 
Against the background of displacement of Kurds from
the oil-rich city of Kirkuk, the Russians started
drilling for oil in that city and dealing with the
Iraqi regime in violation of the UN resolution 688,
issued specifically to protect Kurds and other Iraqi
population against Saddam's wrath. The Iraqi regime
has intensified atrocities against Kurdish populations
under its control, in particular populations of Kirkuk
and Khanaqeen. In less than a month, form 1 to 27 Nov
1999, 46 Kurdish families, total of 289 people were
displaced into Kurdish self-rule area. This makes the
total figure for this year, from 1 Jan to 27 Nov 1999,
of 455 families and 2,433 persons. During this period,
Iraq increased its oil production in order to sponsor
the UN Resolution 986 Food-for-Oil programme. The
Associated Press (AP) reported on Dec 2 that Russian
and Iraqi oil companies were drilling scores of oil
wells in Kirkuk area. Russian officials reported that
Russian engineers and their Iraqi colleagues were
drilling 45 wells in Kirkuk to boost the production of
the field to 1.1 million barrels a day from the
current 900,000 barrels. AP also reported that last
month, Iraqi Oil Minister said that several Russian
companies were engaged in contracts worth $400 million
to boost Iraq's oil output and to revamp its oil
industry. Zarubezhneft is the only Russian firm
engaged in drilling. The others are working on the
rehabilitation of oil infrastructure. Russian
involvement raises a crucial question. Does doing
business with Iraq breach the 1991 the UN sanctions
against Iraq? Russians may not respect international
sanctions because they have been uneasy about, if not
against, the sanctions on Iraq. Also, Russians do not
concern themselves with the plight of the Kurds since
their ongoing genocide campaign against Chechnya
leaves them with little moral capital to criticize
Saddam's war against the Kurds in Iraq. The US
administration is expected to act more responsibly
than Russia towards Kurds and Arabs of Iraq. The
Al-Jezera Arabic Satellite TV station reported on Dec
2 that Iraq is the sixth largest oil exporter to the
US and Associated Press (Dec 1) translated this amount
as nearly one million barrels of Iraqi crude oil per
day. A UN statement released on last Wednesday stated
that this amount of oil reached to US markets during
the past six-month phase of Iraq's UN - approved
oil-for-food program. Perhaps, that is why media
reports suggest that the US is buying Iraqi crude
through the Russian intermediaries to avoid the
embarrassment of having to deal with Iraq directly.
The Russian companies receive preferential treatment
from Iraq as a reward for their government's
sympathetic stand on the sanctions. Almost all Iraqi
crude oil that goes through the Russians and an
estimated 40 percent of total Iraqi sales, lands in
the United States. The oil-for-food program permits
Iraq to export $5.2 billion worth crude oil every six
months in order to enable the government to buy food,
medicine and other humanitarian goods for Iraqis
suffering under sanctions imposed after Iraq's 1990
invasion of Kuwait. US has been talking about support
for the Kurdish and Iraqi people and has been
sponsoring the 'Iraqi Opposition' for years. One would
have thought that the US would have linked allowing
Iraq to sell oil to improvement of its human right. Is
not buying the Iraqi crude through Russia
circumventing the UN resolution No. 688? 
---------------------------------------------
DECEMBER 02, 09:49 EST 
Iraqis Pray for Rains 
By LEON BARKHO
Associated Press Writer 
BAGHDAD, Iraq (AP) — Thousands of Iraqis held special
prayers for rain Thursday after a year of drought that
decimated cattle and crops. 
Agriculture Minister Abdel-Ilah Hamid Saleh joined the
nearly 3,000 worshippers at the site of a former
airport in Baghdad, where Iraqi President Saddam
Hussein is constructing what is billed as the largest
mosque in the Muslim world. 
Many wept as they raised arms to the sky and recited
verses from the Koran, Muslims' holy book, pleading
with God to preserve Iraq's cattle and crops this
year. 
The prayers were performed on direct orders from
Saddam and officials said they were carried out
simultaneously throughout the country. 
More than 1 million sheep were reported to have
perished and yields of wheat, barley and other cereals
were at least 70 percent lower than expected after too
little rain this past year. The drought further
strained a country already crippled by nearly nine
years of U.N. trade sanctions. 
Saleh, the agriculture minister, said rain was already
late this year, delaying planting that should have
been done in October and November. 
``Now we are in December and the amount of rain (that
has fallen) is not enough to start sowing .... So we
are in a very, very critical situation,'' he told The
Associated Press. 
The U.N. Food and Agriculture Organization in Baghdad
agreed. 
``The present state is so perilous .... Absence of
rain this year is going to have a catastrophic impact
on animals, orchards and vegetable growing areas in
addition to other crops,'' Dr. Al Khair Khalaf-Allah
of FAO said. 
The drought-induced grain shortfall prompted the
government to rely almost entirely on food shipments
under the U.N.-approved oil-for-food program. Wheat
imports surpassed 1.5 million tons every six months
and Iraq's food import bill swelled to nearly $2.2
billion a year. 
Iraq needs about 4 million tons of wheat a year. The
amount of domestic production shipped to state silos
last year was estimated at 700,000 tons. The country
only produced about 100,000 tons of rice last year,
while consumption is at least 750,000 tons a year. 
---------------------------------------------
Thursday December 2 8:24 AM ET 
Source: Russia Undecided on U.N. Iraq Resolution
MOSCOW (Reuters) - Russia is still considering whether
to accept a U.N. Security Council draft resolution
that would insist Iraq accept arms inspectors in
return for easing economic sanctions, a Foreign
Ministry source said Thursday. 
``We are still working on the resolution. There is
work in progress which will continue for the time
being,'' the source told Reuters. 
Iraqi Deputy Prime Minister Tareq Aziz is in Moscow to
try to persuade Russia to reject the draft, drawn up
by Britain and the Netherlands, and press for an
unconditional lifting of sanctions. 
The Foreign Ministry source said he expected Aziz to
remain in Moscow until Friday. 
Earlier Thursday Aziz met Gennady Seleznyov, speaker
of the Communist-dominated State Duma lower house of
parliament, who expressed his support for Iraq and
called for the lifting of sanctions. 
The U.N. has refused to roll over a six-month
agreement under which Iraq is allowed to sell oil for
humanitarian goods, when it expired last week, in an
attempt to force Iraq to accept inspectors. Iraq has
completely halted oil exports as a result. 
---------------------------------
Alabamha headlines, Dec 1
Gulf War Syndrome Clue Detected - (DALLAS) --
Researchers at the University of Texas Medical Center
in Dallas are making progress studying the mysterious
illness that affects veterans of the Gulf War.
Scientists report that high tech scans of Gulf War
veterans' brains detected a marked reduction of an
important chemical thought linked to exposure to nerve
gas or potent pesticides. Many veterans who returned
from the war with Iraq reported an odd combination of
symptoms. Those range from confusion and inability to
concentrate to paralysis, sleep disorders, pain, and
intense anxiety. Researchers believe the discovery
will lead to more effective treatment of the
mysterious illness. 
-----------------------------------------------
Wednesday December 1, 12:57 pm Eastern Time 
FOCUS-Iraq's Aziz rejects short oil deal extension
By Sebastian Alison 
MOSCOW, Dec 1 (Reuters) - Iraqi Deputy Prime Minister
Tareq Aziz on Wednesday rejected as a joke a U.S. plan
for a short- term extension to a U.N. deal under which
Baghdad exports oil in exchange for humanitarian
goods. 
Aziz was speaking on a visit to Moscow aimed at trying
to persuade Russia to help lift U.N. sanctions against
Iraq and block Western-backed attempts to get U.N.
arms inspectors back into Baghdad. 
The United States has proposed following up a two-week
extension of the U.N. oil for food arrangement with
another of perhaps as little as a week to allow world
powers more time to thrash out changes to broad U.N.
sanctions against Iraq. 
When asked if he would reject it, Aziz replied: ``Of
course.'' 
``What can you do in two weeks? You can buy a suit.
You can buy a pair of shoes. You can sell some
potatoes,'' he said. 
``But you cannot sell oil and buy 200,000 tonnes of
wheat or 50,000 tonnes of rice and so on. So this two
week extension is a joke.'' 
Iraq's position raises the prospect of a third
consecutive week without Iraqi exports and more
tightening of global supply in a market hungry for oil
at the onset of peak winter demand. 
``The (oil) programme is for six months. It does not
work unless it's for a reasonable period. These
periods are not reasonable, they are not practicable
and so they are meaningless,'' he said after a joint
news briefing with Russian Foreign Minister Igor
Ivanov. 
Aziz is in Moscow to try and drum up support from
Russia, a Security Council member, for the lifting of
U.N. sanctions in place against Iraq since the end of
the Gulf War in 1991. 
He reiterated Iraq's rejection of a Western-backed
comprehensive draft resolution as the basis for
discussions on a possible suspension of sanctions
following a resumption of weapons inspections. 
Ivanov told the briefing Russia would address the
issue of Iraqi sanctions strictly within the law, but
added that he favoured a full lifting of the
restrictions. 
``The problems must be resolved strictly in accordance
with the norms and principles of international law,
exclusively by political and diplomatic means,'' he
said. 
RUSSIA IS IRAQ'S BIGGEST CREDITOR 
``We believe it is essential to establish clearly
defined criteria for the suspension of sanctions ...
but in any case we regard suspension as only a
transitional step which should lead to a complete
lifting of sanctions.'' 
Russia is Iraq's biggest creditor, and has little
chance of being repaid until sanctions end and Russian
oil companies, which have been active in signing deals
to develop Iraqi reserves, are allowed to begin work
in the post-sanctions era. 
The oil programme, under which Iraq has sold up to 2.4
million barrels per day of crude, has always worked in
phases of six months, with each one up to now being
rolled over on expiry. 
But when the last, sixth phase expired, the United
Nations Security Council only allowed a two-week
extension to allow more time for world powers to
discuss a proposed comprehensive overhaul of
sanctions. 
That short extension expires on Saturday. 
Aziz pointed out that Iraq could not at present sell
more oil overseas as it did not now have any export
contracts in place and would have none until the
seventh phase starts. 
Aziz also ventured comments on Russia's war with
Islamic rebels in Chechnya, seen by some analysts as a
potential blight on Russian relations with Islamic
countries. 
``The events in the North Caucasus are a purely
internal matter for Russia, and we categorically
condemn any meddling in its internal affairs,'' Aziz
said. 
``We condemned efforts by some circles to use the
events in the North Caucasus against Russia, to set
Russia and Islamic Arab countries against each
other,'' Ivanov said. ``Such attempts have absolutely
no future.'' 
-------------------------------------
Mujahideen Khalq stationed on the buffer zone between
Kurds and Saddam Kurdish Media - 
Dec 1, 1999 SULEMANI, Southern Kurdistan (Kurdish
Media) - 
Media of Southern Kurdistan reported that the Iraqi
regime has stationed elements of the Iranian
organisation, Mujahideen Khalq, in the buffer zone
separating Kurdish self-rule area with the Iraqi
regime’s control area. The patriotic Union of
Kurdistan radio station said (on Dec 1) that on Nov 8,
the Iraqi regime delivered Mujahideen Khalq members in
60 vehicles into Qara-Tapa and Chamchamal, in Southern
Kurdistan. The infamous terrorist organisation acted
on behave of Iraqi regime to massacre Kurds and Arabs
of Iraq during the uprising of spring 1991, after the
Gulf-War 
--------------------------------------
Wednesday December 1 4:07 AM ET 
Oil Prices Up on Stocks Decline, Iraq
SINGAPORE (Reuters) - Oil prices inched up in Asia on
Wednesday, supported by U.S. data showing a decline in
weekly oil inventories and Iraqi indications that a
one-week extension of a U.N. oil deal was
unacceptable. 
January New York Mercantile Exchange (NYMEX) crude
futures were trading at $25.07 per barrel, up 48 cents
from their close in New York. 
The contract had dropped sharply in New York trade on
Tuesday, ending the day $1.37 off at $24.59. 
But prices recovered in Asian trade, after an American
Petroleum Institute (API) report late on Tuesday
showed a decline in U.S. crude stocks for the third
consecutive week. 
API said crude stocks for the week ended November 26
fell 3.56 million barrels. It also reported a fall of
1.54 million barrels in gasoline stocks, although
distillates, which includes heating oil, were higher
by 1.68 million. 
Further support came from comments on Wednesday by
Iraqi Oil Minister Amir Muhammed Rasheed that a U.S.
proposal for a one-week extension of Iraq's
``oil-for-food'' deal with the U.N. was not
acceptable. 
``I think this is another sinister step by the
American administration to blackmail other members of
the Security Council and definitely will not be
acceptable,'' Rasheed told reporters in Amman. 
He also reiterated Baghdad's rejection of a
Western-backed comprehensive draft resolution as the
basis of discussions at the Security Council to ease
sanctions on Iraq in return for a resumption of
weapons inspections. 
The halt of Iraqi exports had pushed U.S. crude prices
to a nine-year high of $27.15 at the start of last
week. 
The market had cooled down subsequently on assurances
by Saudi Arabia that it was committed to maintaining
stability in the oil market, and would not allow
prices to rise out of control. 
But traders said a crude rally could potentially
resume on the API data and haggling in the United
Nations about Iraq's policy that could once again
disrupt Iraqi oil exports. 
A senior Western diplomat said on Tuesday the United
States would seek an short extension, possibly only
one week, to Iraq's oil-for-food deal with the U.N. 
This was to provide the U.N. Security Council with
more time to consider its overall policy on Iraq. 
The Security Council has until Saturday to renew the
deal and must decide if this would be an short
extension or for the customary six months. 
Last week, an earlier U.S. proposal for a two-week
extension of the deal was rejected by Iraq. 
-----------------------------------------------------
Tuesday November 30 12:08 PM ET  
Iraqi Oil Output Is Cut 75 Percent 
By LEON BARKHO Associated Press Writer  BAGHDAD, Iraq
(AP) - 
Iraq has cut its daily oil production by 75 percent
since it halted exports under the U.N.-approved
oil-for-food program, Oil Ministry officials said
Tuesday.  But the officials, speaking on condition of
anonymity, said they can quickly regain lost
production if the Security Council offers to extend
the oil deal for another six months and the government
accepts.  Daily oil production has plunged to nearly
750,000 barrels a day from a peak of 2.95 million per
day before Iraq halted exports under the program, the
officials said.  Iraq needs about 650,000 barrels per
day for domestic consumption. Exports of nearly
100,000 barrels per day to Jordan, under a special
U.N. permit, are continuing, the officials added. 
Output soon will be raised substantially, they said,
to keep on hand enough of the liquefied petroleum gas
on which the country relies for most of its domestic
consumption.  Iraq halted most oil exports last week
to express its indignation at the Security Council's
decision to extend the previous six-month phase of the
oil program for only two weeks while it tries to break
a deadlock on forming a broader Iraq policy. The
program routinely has received six-month renewals. 
Diplomats said Tuesday that the United States was
proposing another brief extension for the program,
whose mandate expires Saturday. The weeklong extension
would give more time for negotiations on the larger
resolution on policy toward Iraq.  Russian news
agencies reported that Iraqi Deputy Prime Minister
Tariq Aziz arrived in Moscow on Tuesday for talks
aimed at gaining support for the easing of U.N.
sanctions against his country. Russia favors easing
the sanctions against Iraq and reviving trade as a way
for Iraq to pay off a multibillion dollar debt to
Russia.  Aziz planned to meet with Prime Minister
Vladimir Putin and Russian oil officials during his
four-day visit, the Interfax news agency reported. 
Iraq has been under strict U.N. sanctions since its
1990 invasion of Kuwait, which led to the Gulf War.
Three years ago, the United Nations began permitting
Iraq to sell limited amounts of oil to buy badly
needed food and medicine for Iraqis suffering under
the embargo.            
------------------------------
Tuesday November 30, 8:33 am Eastern Time 
ANALYSIS-Ideal conditions for Iraqi wheat buying
By Greg Frost 
PARIS, Nov 30 (Reuters) - Iraq's acceptance of a
six-month extension of its oil-for-food deal makes it
likely it will soon return to the world wheat market,
and analysts say the timing could not be better for
Baghdad. 
That's because Iraq's biggest currency earner -- oil
-- recently hit nine-year highs while world grain
prices are mired in a slump because of huge global
supplies and sluggish demand. 
Indeed, wheat futures on the Chicago Board of Trade
sank to contract lows on Monday, with the spot
December future falling to its lowest level in 22
years. 
``The combination of high oil prices and low world
wheat prices would seem to signal an appropriate time
for Iraq to cover its forward grain requirements,''
said Bill de Maria, assistant executive director of
the London-based International Grains Council (IGC). 
Iraq confirmed on Saturday it would accept an
extension of the oil-for-food deal with the United
Nations, a programme that allows Baghdad to sell $5.26
billion in oil every six months to buy food, medicine
and other goods. 
Before agreeing to the extension, Iraq last week
halted oil exports. That raised fears of a long
stoppage that might cut deeply into consumers' already
spare oil stocks, and sent benchmark Brent crude
futures to their highest level since the Gulf crisis
earlier this decade. 
Oil prices have since fallen back from those highs but
are nonetheless double the level they were earlier
this year. 
While Iraq will have ample means to buy wheat, the
bigger question is to whom Baghdad will turn for its
purchases. 
A POLITICAL PROCESS 
The IGC has estimated Iraq will import 2.7 million
tonnes of wheat in the current 1999/2000 crop year,
roughly unchanged from the past three years. 
Under the terms of the oil-for-food programme, Baghdad
typically holds a wheat import tender twice a year,
reviews offers from traders and then selects from a
variety of origins. 
But unlike poorer countries which make their buying
decisions mostly on price, Iraq -- flush with cash
from oil exports -- has increasingly made what many in
the trade intrepret as a political statement with its
wheat buying. 
``Iraq's purchases are increasingly political,'' a
French grain exporter said earlier this year. ``It
buys if it is satisfied with a country.'' 
Iraq in June held its most recent wheat import tender
under the sixth stage of the oil-for-food deal and
bought 1.3 million tonnes, of which 600,000 tonnes
were Australian. 
Firms from Russia and Saudi Arabia, which sold large
chunks of wheat to Iraq in the fifth stage of the
programme, maintained substantial shares of the market
in the sixth stage. 
Iraq only bought 50,000 tonnes of French wheat at the
most recent tender, after having bought more than
650,000 tonnes in the 1997/98 marketing season. 
Grain traders said, however, that the loss of business
for France had less to do with politics and more to do
with a shift in Iraq's specifications for milling
wheat. 
TOO EARLY TO SPECULATE 
Trade sources said this week that while Iraq would
probably announce a new tender in the coming weeks to
buy wheat, the political nature of its wheat-buying
made it hard to predict who would win the business. 
``We don't know, for instance, if they're going to put
preference on the Russians as they did last time,''
one European grain trader said. 
``It's still not even been confirmed how much of the
previous business (from Russia and Saudi Arabia) was
actually executed.'' 
Another trader agreed it was probably too soon to say
whom Iraq would pick, and most major exporters were
sitting on a ``mountain'' of grain. 
``Last year Iraq took quite a few cargoes from the
Ukraine, and this year I would assume a lot of cargoes
could come from Kazakhstan,'' the trader said. Russian
firms sold Iraq wheat from Ukraine, Kazakhstan and
Russia under the fifth stage of the accord. 
Argentina, Canada and Australia were also possible
suppliers, the trader added. 
A third source reckoned Iraq could turn to Turkey,
which is said to have an export potential this year of
up to 2.0 million tonnes of wheat and which only
cleared out a small part of its surplus last week at
an export tender. 
-----------------------------
Monday November 29, 4:21 pm Eastern Time 
Iraq 6th phase oil exports 389.6 mln bbls - U.N.
UNITED NATIONS, Nov 29 (Reuters) - Iraq shipped about
13 million barrels of crude oil in a half week through
last Wednesday when it halted oil exports to protest a
stopgap extension of the program by the U.N. Security
Council, U.N. figures released on Monday show. 
This brings to 389.6 million barrels the crude oil
Iraq sent to the world oil market in Phase 6 of the
``oil-for-food'' program that began on May 25. 
About 45 percent of oil exported in the sales phase
went to Europe with 39 percent going to the United
States, 14 percent to the Far East and the remainder
to Brazil and South Africa, the U.N. said. 
The United States' portion of Iraqi crude fell from 45
percent in the previous six-month Phase 5 of the
program. 
Iraq's four-week export rate is between 2.3 million
barrels per day (bpd) to 2.4 million bpd. 
In Phase 6, Iraqi oil sales totaled an estimated $7.45
billion, the U.N. said. 
Although Iraq has Security Council authorization to
export oil in Phase 6 of the program through December
4, Baghdad halted exports last Wednesday. 
When Iraq would resume oil shipments was not clear on
Monday. Iraq has said it would resume shipments once
the U.N. Security Council renews the program for
another six months. But the United States and Britain
on Monday talked of another stopgap extension of Phase
6, similar to the one that led Iraq to suspend oil
shipments. 
Phase 6 of the program like the previous five sales
phases since the program began in December 1996 was to
run for six months. But it was extended by two weeks
beyond its original expiration of November 20 as
Russia and the United States sparred over Iraq policy.

When the two sides agreed to a two-week extension,
Baghdad balked, halting oil shipments at least
temporarily. 
Iraq's oil ministry said that its daily production
rate for November was 2.95 million bpd, which it said
Iraq would exceed in December. 
Generally, Iraq's export rate is about 550,000 bpd
less than its production. 



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