BAGHDAD, Iraq (AP) – The Iraqi organization empowered to resume the oil exports crucial to reviving the country’s economy has received inquiries from potential foreign buyers, the agency’s newly elected chief said Wednesday.
The State Oil Marketing Organization, known also as SOMO, plans to begin shipping crude by the middle of next month, first through Turkey and soon after from Iraq’s export terminal in the Persian Gulf, Mohammed al-Jbouri said in an interview.
Thamer al-Ghadhban, the interim chief executive at Iraq’s oil ministry, said separately that exports could begin sooner. Al-Ghadhban told the coalition’s radio station Voice of New Iraq that Iraq would re-enter the world oil market “within a week.”
Iraq exported as much as 2.1 million barrels of crude a day before the U.S.-led invasion halted all shipments. The U.N. Security Council decided last week to end 13 years of economic sanctions against Iraq, a major step toward resuming exports.
Oil exports will be a major resource to pay for the reconstruction of an economy battered by wars, misrule, looting and a lack of spare parts due to the U.N. embargo dating to Iraq*s 1991 invasion of Kuwait.
“We have technical and logistical obstacles to overcome, so we should probably be ready to export within the next two to three weeks,” al-Jbouri said.
SOMO has signed no sales contracts so far but has received several requests from foreign companies and the purchasing arms of foreign governments.
Under the U.N. oil-for-food program, SOMO, which began operating in 1972, had designated the foreign companies it would sell to for six months at a time. Since the war, however, potential buyers have expressed concern about the lack of an authorized seller of Iraqi oil amid the postwar political upheaval here.
Without a green light from an authorized seller, they worry about their legal rights to any Iraq oil they might want to ship from U.N.-monitored storage tanks in Ceyhan, Turkey. As a result, some buyers fear that rival companies might challenge their title to this oil and try to impound their tankers.
Al-Jbouri sought to allay such concerns, insisting that SOMO remains the only government body designated to sell crude to foreigners. The international oil industry has recognized it as “the efficient authority” to do so, he said.
Sales “will be open to all our old customers,” he added.
SOMO has signed no sales contracts so far but has received several requests from foreign companies and the purchasing arms of foreign governments. Al-Jbouri declined to specify the number of these requests. One of them came last Thursday from the London office of a Chinese government buying agency called Sinochem International Oil Co., he said.
When Iraq finally resumes exports, it will “most probably” ship its first crude from the Mediterranean port of Ceyhan, where 9.3 million barrels of Iraqi oil are now in storage. It will begin shipping from its Gulf terminal of Mina al-Bakr a few days later, Al-Jbouri said.
Al-Jbouri, a former deputy director general at SOMO, was selected by his peers to become the organization’s new director general. He said he expected to take over on Monday from the current SOMO chief, Ali Rajab Hassan, who is stepping aside.
AP-ES-05-28-03 1415EDT
Send questions/comments to the editors.
