Iraq turns the tap back on

A tender to sell 10 million barrels of Iraqi oil was awarded on Thursday to six companies, including ChevronTexaco of the US.

News that Iraqi supplies had finally resumed helped push oil prices lower in New York, with crude futures closing down 85 cents at $31.51.

Before the war, Iraq shipped about 1.7 million barrels a day, roughly 4% of world exports.

However, the country's export capacity is expected to remain well below pre-war levels for several months because of damage and looting at the country's oil facilities.

Fair deal

The other five companies sharing in the tender were Repsol and Cepsa of Spain, Tupras of Turkey, France's Total, and Italian oil firm ENI.

The even-handed distribution of contracts confounded expectations that US and UK firms would glean the lion's share of Iraq's first oil shipments, in recognition of the lead role that those countries played in toppling Sadam Hussein's regime.

"One would have thought that [Iraq's oil authorities] would have awarded more to US and British companies," an oil trader told the Reuters news agency.

"And given the French position in the war, people are surprised that Total has got in there with two million barrels."

About 5.5 million barrels are destined for the European market, with a further four million bound for the US, Iraq's State Oil Marketing Organisation said.

The remaining 500,000 barrels will be sold at the seller's discretion.

Physical deliveries are expected to start in about 10 days' time.