US May Tap Oil for Iraqi Loans

US May Tap Oil for Iraqi Loans
By Warren Vieth
Los Angeles Times
July 11, 2003

The Bush administration is considering a provocative idea to pledge some of Iraq's future oil and gas revenue to secure long-term reconstruction loans before a new Iraqi government is in place to sign off on the proposal. The plan, endorsed by the Export-Import Bank of the United States and some of America's biggest companies, would help avert a looming cash crunch that has the potential to stall the postwar rebuilding effort. One U.S. official rated the proposal's prospects at 50-50.

But the plan is drawing fire from some administration officials, lawmakers, policy analysts and prominent Iraqis who say it would mortgage the Persian Gulf nation's most treasured resource, prevent future leaders from deciding how to spend their oil money and put U.S. taxpayers at risk.

"Iraqis believe their oil should not be touched by foreigners, that it should remain in the hands of the Iraqi government and that no one has a right to do anything before an elected government is in place," said Fadhil Chalabi, executive director of the Center for Global Energy Studies in London and a former Iraqi Oil Ministry official. "As an economist, I believe in what they are proposing. You couldn't come up with a better formula," Chalabi said. "But Iraqi politics and the way they look at these things are not encouraging. It could create problems later on. Better to wait until a government is formed."

That may be too late, in the view of the plan's supporters. The Export-Import Bank and an industry coalition that includes Halliburton Co., Bechtel Group Inc. and other major companies that are interested in winning contracts in Iraq are warning that unless steps are taken soon to secure new funds, the reconstruction well could run dry. (snip/...)

http://www.globalpolicy.org/security/oil/2003/0711loans.htm

LBN rules state that an article can't be more than 12 hours old and still be considered "Late Breaking"

The article above is dated July 11th--more than 12 hours ago.

Please feel free, however, to repost it in another forum

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