Iraqi Oil Back In Pipeline Saddam Presses Button To Begin Oil-For-Food Deal

Saddam Hussein was showered with flowers after making a surprise appearance at a pumping station Tuesday to open the pipeline carrying the first Iraqi oil exports since the Persian Gulf War.

But 29,000 barrels later, Iraq stopped pumping oil to Turkey because it jumped the gun before the United Nations formally approved any contracts for delivery of oil, U.N. officials said. Later Tuesday, U.N. officials gave authorization for the first contracts.

Under a closely monitored U.N. deal, Iraq will be allowed to sell $2 billion worth of oil over an initial 180-day period.

The revenues will be used to compensate war victims, pay for U.N. weapons monitoring and provide badly needed commodities for an economy battered by trade sanctions imposed after Iraq invaded Kuwait in 1990.

The oil-for-food deal was heralded as a great victory in Iraq, even though Saddam for months had rejected the U.N. monitoring as an affront to the country’s sovereignty.

“Iraq’s black gold flew today, marking the first step on the route to prosperity for Iraqis under the leadership of President Saddam Hussein,” the government al-Iraq newspaper said in an editorial. Onlookers welcomed Saddam with flowers and cheers before he pushed the button to begin the oil.

Turkey also welcomed the oil flow to the Yumurtalik terminal on the Mediterranean, having been hard hit by the loss of jobs and hard currency since the sanctions were imposed on one of its main trade partners.

Saddam and senior government officials, all in military uniforms, arrived in heavy rain for the ceremony in this northern city. The pipeline runs for 215 miles in Iraq and 400 miles more through Turkey. The Iraqi leader held his hands open as if invoking a prayer before switching on the oil.

The Iraqi return to world oil markets did not go without a hitch.

Officials claimed there was a power outage in the area caused by rain, and Fatih Sen, director of the Yumurtalik terminal, told state TV that the pumping of oil had begun but was then halted for an unspecified reason near the Kirkuk oil fields.

Under the oil-for-food agreement, the United Nations must approve each contract. Since the four officials who must sign off on contracts could not begin their work until 12:01 a.m. Tuesday, none had been approved by the time the ceremony began.

After the ceremony, U.N. monitors from the Dutch firm Saybolt promptly shut down the pipeline until confirmation from New York that the contracts were approved, the U.N. officials added.

They said the mix-up was not considered a serious breach of the agreement and would not affect its implementation.

In Baghdad, newspapers devoted most of their front pages to news of the oil-for-food deal, saying it constituted the first crack in the crippling U.N. sanctions.

The deal was reached in May but delayed by Saddam’s objections and U.S. government anger at Saddam’s incursions into Kurdish protected areas in northern Iraq.

When the final go-ahead came Monday night at U.N. headquarters in New York, Iraqis poured into the streets, dancing, singing and firing shots into the air. Basic commodities from medicine to beans and cooking oil are in serious short supply.

About 150 U.N. inspectors will make sure humanitarian supplies are distributed equitably under the program, and another 30 will monitor food and medicine imports.