15 June 2001
In a further sign of deteriorating relations with neighboring Iraq, Saudi Arabia has confiscated an Iraqi-built crude oil pipeline that runs across the Kingdom to the Red Sea port of Muajjiz. The $2 billion IPSA line has been closed for nearly 11 years. The move came two weeks after Saudi Arabia complained to the UN that Iraqi troops had been attacking Saudi border guards since March.
Officials in Riyadh admit that the seizure was politically motivated, in retaliation for Iraq’s military moves. A Saudi letter to the UN vaguely explained that Riyadh seized ownership because Iraq had caused “serious damage to the Saudi people in terms of lives and property, as well as to natural resources and the environment.”
Saudi officials say they don’t know whether they want to reopen the pipeline. The line, with a capacity of 1.65 million b/d, operated for less than a year before Riyadh shut it down in August 1990 following Iraq’s occupation of Kuwait. Technical analysts claimed at the time that the sudden closure had resulted in crude separating from water, seriously corroding the pipe and leaving it inoperative.
The tensions coincided with frantic discussions among Security Council members aimed at reaching agreement on a new oil-for-food resolution by Jul. 4. Experts from the five permanent members held two-day meetings in Paris this week to try to reach consensus on the list of “controlled goods” suggested by the US. They will meet again at the end of the month in New York. On the table are two draft resolutions — a rewritten British one, and a new one proposed by the French. The French draft includes a clause calling for all restrictions to be lifted on foreign investment and on Iraqi spending on civilian sectors, including oil.
By Ruba Husari, London
(Published in Energy Compass, 15 June 2001)