Iraq oil exports set to restart 'soon'

In this story: Supply cut off in price dispute New contracts soon RELATED STORIES, SITES

DUBAI (Reuters) -- Iraq will restart its oil exports "soon," putting an end to a suspension in flows which began on December 1 over a price dispute between Baghdad and the United Nations, an Iraqi oil official said on Sunday.

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"Oil exports will resume soon, especially at Mina al Bakr," the Iraqi oil official told Reuters by telephone from Baghdad. "Ships are near the terminal and soon they will go to the terminal."

Asked whether soon meant on Sunday, the official said: "Wait and see later in the day."

The imminent resumption of some 2.3 million barrels per day (bpd) of Iraqi oil sales comes on the heels of Baghdad's tacit approval on Saturday of a United Nations resolution extending the oil-for-food programme for another six-month phase.

Less than 24 hours before Iraq gave its apparent nod to the U.N. oil sales programme, a U.N. committee agreed to Baghdad's revised proposals for December oil prices.

Supply cut off in price dispute

Iraq cut off its oil flows, about five percent of the world's exports, after U.N. oil overseers rejected Baghdad's original December oil prices as being too low.

Industry sources said Iraq's original discounts were an attempt to compensate its customers for a 50-cent per barrel surcharge to be paid outside the U.N.'s control.

Oil lifters refused to cough up the payment which many described as a blatant violation of U.N. sanctions imposed against Iraq for its 1990 invasion of Kuwait.

Baghdad later denied it had made such a demand and oil traders said it has subsequently been dropped.

New contracts soon

The oil official said state oil marketer SOMO was preparing to sign new crude oil contracts under the ninth phase of the U.N. oil-for-food programme which began on December 6. The package allows Iraq to sign unlimited amounts of oil under U.N. supervision in exchange for food, medicine and humanitarian aid.

"We will sign ninth phase contracts soon," the official said.

In the meantime, five oil tankers -- Jade, Astro Beta, Crude Traveller, Panormos and Sahara -- were queued up to load Basrah Light grade from Iraq's Mina al Bakr terminal, industry sources said.

It was unclear whether the U.N. would count those vessels as eighth or ninth phase contract volume. But the oil official said the phase classification was not an issue.

"Whether it's eighth or ninth phase, this will not be a problem," he said.

It remained to be seen whether Baghdad would carry out its threat to punish those companies supplying U.S. companies with its crude oil.

"We must see what the government says," the Iraqi oil official said. "Then we will follow instructions."

The United States, Iraq's biggest enemy, has been lifting some 750,000 barrels per day of Iraqi oil via third parties.

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