DATE=2/29/2000
TYPE=CORRESPONDENT REPORT
TITLE=IRAQ OIL OUTPUT
NUMBER=2-259691
BYLINE=JON TKACH
DATELINE=WASHINGTON
INTERNET=YES
CONTENT=
VOICED AT:

INTRO:  A former Iraqi oil official says Iraq has the 
potential to drastically increase its oil output - 
possibly glutting world markets. Weeks before OPEC 
ministers meet to consider upping production to bring 
down soaring oil prices, industry experts are weighing 
the impact of that possibility.  V-O-A's Jon Tkach 
[kotch] reports.  


TEXT:  Fadhil Chalabi, a one-time OPEC under-secretary 
general and former Iraqi oil official, says Iraq could 
soon produce more than ten-percent of the world's 
daily oil demand.

            /// CHALABI ACT ///

      This huge amount of oil would not take long to 
      be expanded. In five or six years it can reach 
      six million or seven million (barrels per day).  
      In a matter of eight years Iraq can reach eight 
      million. 

            /// END ACT ///

Mr. Chalabi told a private Washington conference on 
Iraq's oil industry (Tuesday) that demands for hard 
cash and investment following nearly eleven years of 
international sanctions could convince Baghdad to sell 
oil outside of OPEC - possibly leading to a drastic 
increase in supply, and a consequent fall in oil 
prices.

Mr. Chalabi also says current industrial growth around 
the world will not demand as much oil as forecasters 
believe - making the impact of any increase in Iraqi 
oil output even greater.

But Ed Porter, of the American Petroleum Institute, 
believes the oil forecasts are on the mark, and that 
growing demand will absorb an increase from Iraq if it 
is phased in slowly - say over ten years or so.  

But, he also says Iraq has affected world markets in 
the past by over-producing.

            /// PORTER ACT ///

      In fact in `98 when prices declined so rapidly, 
      a big portion of that decline was due to Iraq.  
      Their production from late `97 through the end 
      of `98 rose over a million barrels a day, which 
      was more than the world increase in demand 
      because of the slowdown in Asia.

            /// END ACT ///

Mr. Porter says that because oil prices have 
skyrocketed since then, Iraq's greatest threat now is 
to stop producing as much oil - driving prices even 
higher.

Iraq has already threatened to cut back oil production 
if the United Nations continues to block the delivery 
of spare parts Baghdad says it needs to maintain 
production.  The parts are currently being held up 
because of fear they will be used for military 
purposes. 

Despite recent pressure to lift sanctions, the U-N 
Security Council shows little indication of doing so 
as Iraq continues to reject a return of international 
arms inspectors. (signed)


NEB/JON/gm 



29-Feb-2000 17:53 PM EDT (29-Feb-2000 2253 UTC)
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Source: Voice of America
.