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IRAQ - How The Deals Are Done with Rashid.

All E&P deals, PSAs and service contracts (SCs) for the upstream must be approved by the top political leadership, i.e., by Saddam Hussein. The same will be true in the case of downstream deals to be signed with foreign companies in future, and in the case of pipeline deals with neighbouring countries.

Al Rashid's role in these categories of deals is limited to being the top liaison man between Saddam's leadership and the technocrats of the oil ministry. The technocrats will work out the technical details and present them to the political leadership in the form of recommendations, together with alternative details which they will have to recommend as well. Then the political leadership will instruct the technocrats which of the details they will have to negotiate with the foreign companies, or neighbouring governments.

If the other party comes up with different details or terms for negotiat-ion, the technocrats will first refer them to the political leadership, through Al Rashid. The political leadership will then give the technocrats instructions on how to proceed in negotiating with the other party.

Even in OPEC matters Al Rashid's role is limited to his being the top liaison man between the political leadership, i.e., Saddam and the Vienna-based organisation or its other member-states. Thus, in early 1999 Al Rashid sent a letter to OPEC's current president, Algeria's Energy Minister Youcef Yousfi, and all the other member-states saying Saudi Arabia must cut its production by 2m b/d to boost crude oil prices.

Al Rashid told a press briefing at the end of OPEC's ministerial meeting on March 23, 1999: "Saudi Arabia, at the time out production went from the market (in Aug. 1990 because of the UN embargo), increased its production by 2m b/d.

So when Iraq is back in the market, Saudi Arabia should bear the whole reduction in production. If we take the July 1990 (OPEC) resolution, Saudi Arabia would have a production of about 6.3m b/d". He noted: "Iraq is a founding member and OPEC was initiated in Baghdad in 1960... Iraq has a very important role to play in the overall decision (of OPEC), although not on quotas (because Iraq was excluded from the March 23 deal on output cuts), because we have a different view". He then repeated what all Iraqi official say: the UN sanctions must be lifted.
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Publication:APS Review Oil Market Trends
Date:May 17, 1999
Words:396
Previous Article:IRAQ - Profile - Amer Mohammed Al Rashid.
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