U.N. Says Oil Exports Slow to Rise to Help Needy Iraqis
December 31, 1998
Web posted at: 10:10 PM EST (0310 GMT)
NEW YORK (Reuters) -- Iraq's people are unlikely to see an increase in
humanitarian supplies in 1999 without a sharp rise in oil prices, as
investment in the country's crumbling oil infrastructure will take at
least a year to produce results, according to a United Nations report
released on Thursday.
Most ordinary Iraqis get their basic food and medical supplies via the
U.N.'s "oil-for-food" programme, which allows Iraq to export oil under
strict supervision as an exception to the oil embargo in place since the
1990 invasion of Kuwait.
Two-thirds of funds from the oil sales go to buy food, medicines and other
supplies for Iraq's people; the other third pays U.N. costs and war
reparations. Iraq is theoretically permitted to sell up to $5.256 billion
of oil over six months, which the U.N. says is the amount needed to meet
the basic needs of Iraq's 22 million people. But Iraq, in fact, is only
expected to raise about half that because of low oil prices and its poor
infrastructure.
Thursday's report, written by U.N. staff after a group of oil industry
experts from the Dutch company Saybolt visited Iraq earlier this month,
says the country's oil production is declining at a rate of 4 percent a
year. It says that even after spending the $600
million that Iraq is allowed to divert from humanitarian goods to oil
infrastructure repairs, oil production is likely only to remain at current
levels of about 2.5 million barrels per day (bpd), of which a little under
1.9 million bpd is exported.
The Saybolt team said some oil fields are being harmed and some face
irreparabe damage unless improvements are made soon.
Before sanctions were imposed, Iraq, which sits atop the world's
second-largest oil reserves afterSaudi Arabia, exported 3.2 million bpd of
oil.
The impact of sanctions on Iraq's population has been devastating and
shows little sign of improving. The United Nations International
Children's Emergency Fund (UNICEF) has reported that a million Iraqi
children under five are chronically malnourished, an
increase of 72 percent since 1992. Iraq claims that a million people have
died as a result of sanctions.
"It is extremely unlikely that the Iraqi oil industry will ever meet the
planned production targets associated with the oil-for-food programme,
within the current constraints," the report said.
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