Iraq set for oil deal with UN

Ankara (AP) - Iraq may reach a decision on a United Nations plan for it to sell oil in exchange for humanitarian aid during talks next week, the Iraqi oil minister said yesterday.

"We are thinking very positively this time. Negotiations are seriously under way. We hope to come to a final decision in the next talks with the UN on 11 March," Amir Mohammed Rasheed said, in the southern Turkish town of Ceyhan.

Mr Rasheed visited the Turkish oil terminal at the Mediterranean town of Yumurtalik, near Ceyhan, after crossing the border at Habur yesterday.

The visit is in connection with the possible reopening of an oil pipeline that has been closed under UN sanctions since the invasion of Kuwait in 1990. Iraq has rejected previous UN attempts to allow Iraq to make limited oil sales.

"We are here for the reopening of the pipeline," Mr Rasheed said. It was apparently the first time that an Iraqi official had travelled across northern Iraq since the end of the Gulf war.

Iraqi Kurds have established a de facto state in the northern part of the country under the protection of a US-led allied air force, based in Turkey. Under UN sanctions, air travel between Baghdad and Ankara is banned.

The state-run pipeline company, Botas, said the Turkish part of the pipeline could be operational in a month, once the UN and Iraq came to an agreement. It was not clear how much work is needed on the Iraqi half of the pipeline. Mr Botas said the oil flushing could be completed in 80-90 days.

Under the UN plan, the oil would be used in Turkey's domestic refining network. In exchange for oil, Turkey would send humanitarian goods to Iraq. A portion of the funds generated through the plan would go to a UN fund, to pay for war reparations.