DATE=12/11/00

TYPE=CORRESPONDENT REPORT

TITLE=IRAQ / U-N / OIL (L)

NUMBER=2-270330

BYLINE=SCOTT BOBB

DATELINE=CAIRO

CONTENT=

VOICED AT:

INTRO: Iraq has officially accepted a renewal of the United Nations oil-for-food program, which is aimed at helping Iraqis hit hard by 10 years of economic sanctions. Some oil-industry sources say this could mean a quick resumption of Iraqi oil exports, but others say Iraq is still insisting on price surcharges. Iraqi oil sales have been suspended for the past 10 days. Correspondent Scott Bobb reports from our Middle East Bureau.

TEXT: The official Iraqi news agency reports the Iraqi government accepted the latest phase of the oil-for-food program in a letter from Foreign Minister Mohammed Saeed al-Sahhaf to U-N Secretary-General Kofi Annan.

The Foreign Minister is quoted as saying Iraq agrees to a six-month extension of the humanitarian program. In the letter to the United Nations, Mr. Al-Sahhaf criticized the U-S and British governments, saying they hope to make the oil-for-food program a permanent substitute for lifting the economic embargo against Iraq.

The U-N program allows Iraq to export oil and use its revenues to buy food, medicine and other non-military goods. The program was devised four years ago, as a result of international concern about the effect that 10 years of economic sanctions were having on the health and nutrition of the Iraqi people.

Iraq has launched a diplomatic and public relations campaign, calling for complete abolition of the sanctions. Growing sympathy for the Iraqis' position, in the Arab world and in parts of Europe, has resulted in dozens of air shipments of humanitarian aid to Baghdad in recent months.

In negotiating the latest phase of the oil-for-food program, Iraq reportedly asked to sell its oil at 50 U-S cents below market price in order to compensate for a 50-cent surcharge it was asking clients to deposit in a bank account outside U-N control. The special U-N sanctions committee that oversees the program rejected this proposal.

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The U-N committee aims to prevent the Iraqi government from using oil exports to rebuild its military. Iraq complains that the committee is slow, and sometimes restricts imports that have no military purpose. (Signed)

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