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Iraq | ||
U.S. Adviser Says Iraq May Break With OPEC | ||
2003-05-17 | ||
EFL The U.S. executive selected by the Pentagon to advise Iraq's Ministry of Oil suggested today that the country might best be served by exporting as much oil as it can and disregarding quotas set by the Organization of Oil Exporting Countries. His comments offered the strongest indication to date that the future Iraqi government may break ranks with the international petroleum cartel. Enjoy, Prince Faisal. "Historically, Iraq has had, let's say, an irregular participation in OPEC quota systems," said Philip J. Carroll, who formerly headed Royal Dutch Shell in the United States and now chairs a commission advising Iraq's oil ministry. "They have from time to time, because of compelling national interest, elected to opt out of the quota system and pursue their own path. . . . They may elect to do that same thing. To me, it's a very important national question." In an interview held in an anteroom off a cavernous ballroom at Saddam Hussein's former Republican Palace, Carroll also signaled that oil contracts signed under the old regime are now potentially void or subject to renegotiation. This is so enjoyable! Hussein's government had an official policy of steering contracts for drilling services, joint production and machinery to companies based in France, Russia and China, whose governments tended to be more supportive of Iraq in the United Nations Security Council. Though Carroll did not single out any potentially imperiled contracts, he asserted that the old system of preferential treatment ended with the demise of Hussein. "There will have to be an evaluation by the ministry of those contracts and a determination of whether they were made in the best interests of the Iraqi people," Carroll said. "Certainly, where contracts are, shall we say, excessively beneficial to one party
And to hell with the Oil-for-Palaces program then. Flows of Iraqi oil to the world market unconstrained by OPEC quotas could further erode the cartel's already limited ability to set prices and might even trigger price wars, eating into the profits of its member countries. Such an outcome would surely delight the Bush administration as well as buyers of gasoline in the United States. With that in mind, commentators — particularly in Europe — have contended that the real purpose of Bush's war in Iraq was to put in place a government that would break OPEC. No, but it's a delightful side-effect. Carroll repeatedly rejected suggestions that he is an instrument of any such policy. "In the final analysis, Iraq's role in OPEC or in any other international organization is something that has to be left to an Iraqi government," he said. "Who will listen carefully." Already, officials within the oil ministry — now supervised by U.S. forces — are actively considering pulling Iraq out of OPEC and exporting as much crude as possible to maximize revenue once the oil fields have returned to full capacity. Asked about those talks, Carroll said: "That is a very good debate for Iraqis to have and I think they ought to do what they believe to be in their national self-interest." Iraq's oil production historically has comprised 90 percent of its economy while bringing in nearly all of its foreign exchange. That flow of oil and money is needed more than ever, Carroll said. "I do believe the assertion that Iraq is going to need every bit of financial wealth that it can lay its hands on," he said. If that means undercutting the Saudis and the Russians, well that's just too bad, eh? Carroll's advisory board is today in fledgling state, counting only himself as chairman and his assistant, Fadhil Othman, a longtime official at Iraq's oil export agency. But as Carroll fills the board with others from the industry, financial experts and lawyers, he plans to embark on a series of studies to help the ministry set policy. Among the key questions the ministry will confront is whether to break up the state oil empire and put some of its pieces into private hands. All options, from maintenance of the old system to complete privatization, will be on the table, he said. Set up a trust like the one in Alaska. Carroll was careful to avoid endorsing any particular structure, but he warned of the pitfalls of maintaining a system dominated by the ministry and the state companies. "Highly centralized models are not always as efficient as they should be," he said. "They are prone to corruption. They tend to be more prone to the government seeing them as a cash cow for funds for other purposes."
Yep. Set up the trust and put the money in the hands of the people there. They'll know what to do. | ||
Posted by:Steve White |
#6 Republican Guards...against the Saudi Forces. Reminds me about Churchill saying that he'd say a few good words about the Devil in the House of Commons. |
Posted by: Brian 2003-05-17 20:06:10 |
#5 Lucky - where are you getting the good weed?? |
Posted by: Frank G 2003-05-17 12:54:14 |
#4 US special forces along with Iraqi Republican military attacked Saudiu Arabia as part of the blueprint for peace in the region. Most aggree it should have happend sooner. The mullahs have cried for help from France but none, as yet, has appeared. Yemen has declared its border closed. |
Posted by: Lucky 2003-05-17 11:46:00 |
#3 Alberta has a good system too. However, looking on the bad side, when the price of oil drops, it becomes unprofitable for many US Domestic producers (and the Russians) to pump the stuff out of the ground. And this war was all about ooooooil? I'm sure some of Dubya's oilpatch pals are wishing it WAS. |
Posted by: Ptah 2003-05-17 06:31:39 |
#2 Before the war started when people were asking who was going to pay for it? I pointed out that OPEC would through lower prices. Even at $20 a barrel payback time on the (financial) cost of the war is about a year. Unfortunately and this has been totally ignored by the 'This war is about oil' crowd, the UK and Australia are net oil exporters, and will pay dearly for their principles. |
Posted by: Phil B 2003-05-17 02:48:49 |
#1 Do I hear ten dollars a barrel? How 'bout nine? O.K. eight, eight, who'll give me eight? |
Posted by: Scott 2003-05-17 01:30:09 |