Iraq Asks Japan for Help in Boosting Its Oil Capacity

Iraq has asked for Japanese investment and technology to boost its capacity to supply oil, sources in the oil industry said Monday.

Ramzi Salman, president of the State Oil and Marketing Organization (SOMO), reportedly told Japanese customers during a visit last week that Iraq wanted $30 billion to expand capacity by 2 million barrels per day by 1995.

Iraqi Oil Minister Issam Abdul-Rahim Chalabi said last month that Iraq’s export capacity stood at about 5 million barrels per day.

The message from Iraq, the oil sources said, was that Japan would receive long-term supply security in exchange for providing cash and technology to Iraq, which is heavily in debt and needs to revitalize its war-torn economy.

Earlier this month, Iraqi Oil Ministry Undersecretary Sami Sharif said Iraq would invite foreign companies to finance the development of new oil fields.

SOMO’s Salman said Iraq wanted Japanese firms to play a key role in helping oil producers expand supply capacity to meet rising world demand, the sources said.

Iraq’s Chalabi will visit Japan in late March or early April at the invitation of the Foreign Ministry to discuss bilateral economic cooperation, government officials said.

SOMO’s mission to Japan is seen as reinforcing a global campaign by OPEC Secretary-General Subroto, who is calling on major consumer nations to provide financial assistance to OPEC producers to stave off an expected oil shortage in the 1990s.

Subroto said as oil production by non-OPEC nations fell by as much as 3 million barrels per day, output by the 13 members of OPEC could increase to 56 million barrels per day over the next five years from the current 23.5 million.

SOMO’s Salman told the Japanese that the reference crude price of $18 a barrel set by OPEC was an appropriate level for both producers and consumers and that it was causing few inflationary fears, the sources said.

Salman said Iraq was keeping to its OPEC-set production quota of 3.14 million barrels per day for the first quarter of 1990, the sources said.