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.
