World Tribune.com

banner2_468

Mubarak may earn billions from secret oil deal with Iraq

SPECIAL TO WORLD TRIBUNE.COM
Wednesday, June 26, 2002

LONDON Ñ Egypt and Iraq have signed a multi-billion dollar oil deal that Western diplomats say violates UN sanctions on the regime of President Saddam Hussein.

The deal calls for Iraqi export of an estimated 300 million barrels of oil to Egypt during 2002, the officials said. It was signed last year and has been implemented over the last few months.

Industry sources said Egypt stands to earn at least $3.3 billion in 2002 from its deal with Iraq. Egypt has not reported the agreement, Middle East Newsline reported, and the UN has not been granted supervision over the Iraqi oil exports.

Industry sources and Western diplomats said Baghdad and Cairo have agreed to split the revenues from the sale of the Iraqi oil. One industry source said the agreement calls for Iraq to receive at least $11 per barrel with Egypt receiving another $7.

"This is black money for Egypt and it's not going to the state budget," a U.S. official who has been following the deal said. "This is pocket money for [Egyptian President Hosni] Mubarak to do what he wants."

But Baghdad has reported a sharp increase in trade in trade and the Commerce Ministry predicted that Egyptian exports to Iraq will reach $3 billion in 2002.

The oil has been delivered through both Jordan and Syria. Under the terms of the accord, Jordan or Syria would receive another $4 per barrel for allowing deliveries through their territory.

The oil deal was reportedly concluded by Egyptian companies and figures close to Mubarak. They include Mustafa Rashdi, who is chairman of several leading Egyptian firms such as EGC, Meditrade and Imex International, which have extensive trade relations with Iraq.

Industry sources said the Iraqi-Egyptian oil deal has alarmed several Gulf Cooperation Council states, particularly Kuwait. The sources said Gulf Arab leaders had urged the United States to demand an explanation from Mubarak during his visit earlier this month to Washington.

In New York, the UN said Iraqi oil exports more than doubled since last week to 7.7 million barrels. Officials said that in the week ending June 21 Iraqi exports have netted an estimated $175 million in revenue, which they said is insufficient to sustain the oil-for-food program.

Print this Article Print this Article Email this article Email this article Subscribe to this Feature Free Headline Alerts