March 31: Iraq Says Ease Oil Sanctions

Iraq has given a guarded welcome to a United Nations decision doubling the amount of money Baghdad may spend on equipment and spare parts for its dilapidated oil industry.

In a bid to get more food and medicine to Iraq, the United Nations Security Council agreed Friday to double the amount of money Iraq can spend on spare parts to repair its ailing oil industry.

Iraq's Oil Minister, Amir Muhammed Rasheed, said that for the decision to work, it must be accompanied by a steady release by the U.N.'s sanctions committee of spare parts that Baghdad wants to buy.

Rasheed also confirmed that Iraq as from this week increased its oil production by 150,000 barrels per day (bpd) and would steadily increase it up to a total of 3.1 million barrels per day by the end of May.

All 15 Security Council ambassadors voted in favor of a U.S.-sponsored resolution without comment.

Independent oil industry experts have said Iraq must rehabilitate its pumping stations if it wants to continue exporting crude through the U.N. oil-for-food program, which lets Baghdad buy humanitarian goods using proceeds from U.N.-supervised oil sales.

Baghdad's oil industry, its main source of revenue, was targeted during the Gulf War and has been decimated by nearly 10 years of sanctions.

The U.N. oil-for-food program was started in 1996 to provide for Iraqis suffering under sanctions imposed after Iraq's 1990 invasion of Kuwait.

The Security Council agreed in June 1998 to allow Iraq to use $300 million every six months from oil-for-food proceeds to buy oil spare parts.

Secretary-General Kofi Annan and the independent experts recommended last year that the amount be doubled so that vital repairs can be made.

The resolution approved Friday allows Iraq to spend $600 million every six months and says the council would consider renewing that amount in future six-month phases.

It also says the council would be willing to consider other ways to improve the oil-for-food program.

British Ambassador Jeremy Greenstock urged Iraq to take advantage of the new spare parts allowance that he said would enable Baghdad to meet the needs of its people.

"This extra revenue and the welcome decision by the government of Iraq to increase its oil production will bring a significant new element of cash into the program," Greenstock told reporters after the vote.

After refusing for months, the United States agreed to the measure and sponsored the resolution to try to deflect criticism of its tough line on Iraq sanctions, which has come under increasing fire at home and abroad.

Deputy U.S. Ambassador James Cunningham introduced the draft on March 24 during an open debate of the council at which most ambassadors and Annan himself criticized the U.S. policy.

Primarily they complained that the United States was paralyzing repairs on the oil industry by placing more than $1 billion in contracts for spare parts and other equipment on "hod" in the U.N. sanctions committee.

Washington says it has to review the contracts to make sure the equipment isn't used to help Iraqi President Saddam Hussein rebuild his weapons of mass destruction.