Foreign oil companies are expected to gain more freedom to invest in Iraq’s oil sector under new “smart sanctions,” U.N. diplomats said on March 1st.
The U.N. officials indicated that along with loosening controls over the import of civilian goods, the modified sanctions would probably also result in changes in the rules covering foreign investment in the Iraqi oil sector.
The new sanctions could also give Baghdad more control over how money from oil revenues is spent.
Iraq is currently allowed to spend $1.2 billion a year on spare parts for its oil industry, with most of the funds going towards the purchase of new equipment.
After Russian energy firm Zarubezhneft was approved for an $8 million project to drill 45 oil wells in northern Iraq, some diplomats suggested that other companies could win similar contracts covering existing oil fields, but not for expanding into new areas.
The new “smart sanctions” are part of a new U.S. policy on Iraq and are designed to alleviate the suffering of Iraqi citizens while preventing Iraqi President Saddam Hussein from rebuilding an arsenal of weapons of mass destruction.
Hans Blix, head of the U.N. Monitoring, Verification and Inspection Commission (UNMOVIC), said on February 28th that the U.N. could consider using satellites to monitor Baghdad.
Blix said that: “While imagery cannot be a substitution for on-site inspections, it can provide a valuable complement to inspections.”
Under U.N. resolutions, sanctions imposed against Baghdad after the Gulf War cannot be lifted until weapons inspectors are allowed into Iraq to certify that it has destroyed all weapons of mass destruction.
But, Iraqi Foreign Minister Mohammed Saeed al-Sahaf, who was in New York for talks with U.N. Secretary General Kofi Annan on February 26th and 27th, said that: “There will be no return for any inspectors to Iraq – even if the sanctions are totally lifted.”
© 2001 Mena Report (www.menareport.com)
