PARIS, 15 Feb. (IPS) A senior Pentagon adviser accused France of striking a deal with Saddam Hussein to oppose military action in return for a lucrative oil contract, a senior Iranian oil expert says no contract could effectively take place in Iraq until the United Nations ends its embargo against this country.

According to Mr. Richard Perle, a former US Assistant Defence Secretary now a hard line advocate of war against Iraq, the French oil giant TotalFinaElf has exclusive exploration contracts worth 60 billions to 75 billions Euros (55 to 70 Billions US Dollars) to develop the massive Majnoon and Bin Umar oilfields in southern Iraq.

"What's distinctive about the Total contract is that it's not favourable to Iraq, it's favourable to Total", Mr Perle, the chairman of the Pentagon's Defence Policy Board, said during an address in New York, adding that French anti-war stance was "driven by economic interests".

But officials at the French oil giant say discussions for the exploitation of the fields, situated in southern regions of Iraq, in the Basra area, near the Iranian borders, which represents respectively five and seven to eight barrels per day, never formalised, as the company abides strictly to the UN resolutions on Iraq.

According to information gathered by the influential French daily "Le Monde" from sources close to the Iraqi Oil Ministry, by the end of 1998, some forty oil firms from all over the world had established contacts with Baghdad to exploit Iraqi oil resources, estimated at 112 bpd, second to those of Saudi Arabia, with 35 billions "exploitable immediately".

However, only the French TotalFinaElf and the Russia LoukOil had, in the past years, been able to place options covering an important part of the Iraqi exploitable reserves, sources said. "To these fields, one has to add probable reserves along Iraqi borders with both Saudi Arabia and Jordan, representing between 60 to 200 mbd", Le Monde quoted Mr. Jean Francois Giannesini, a Chief Engineer at the French Oil Institute (Institut Francais du Petrole).

Mr. Perle’s statement points to an "oil war" looming on the horizon between French and American oil firms and confirms that not only the United States and France have opposing diplomatic attitudes towards Iraq, but they are also divided on the economic front, with oil as the major issue, Washington-London in the one side, Paris and Moscow on the other.

Unless the United Nations Security Council ends resolutions placing Iraq under international embargo, no companies, including French and Russians, would make any move in order to develop Iraqi oil reserves and exploit them", said Dr. Parveez Mina, an independent Iranian oil consultant living in Paris.

He said though French, Russian and Chinese oil firms have, in the past decade, signed agreements with the Saddam government to exploit Iraqi oilfields in Majnoon and Bin Umar, but none of them have started operations.

It is interesting to not that of the five permanent members of the UN’s Security Council having veto right, France, Russia and China are opposed to the United States and United Kingdom’s plans to attack Iraq and topple Saddam Hoseyn.

Asked about French and Russian concerns that their oil firms could be barred from lucrative Iraqi oil market once the Untied States topples Saddam Hoseyn and installs a new government in Baghdad controlled by them, Mr. Mina said not only he does not share these fears, but he thinks that the future Iraqi rulers would not reject French firms out of country under American pressures.

"Not only the post-Saddam Iraqi government would look to diversify as much as possible its sources of revenues, but also the Americans and the Europeans are members of the same family and they have to work together, regardless of their differences", he added, during an interview with Iran Press Service.

Nevertheless, as the Americans increase their war preparations, on the international oil market, the price of the crude continue to rise. It reached 36.36 for the West Texas Intermediate (WTI), which is the American benchmark for the March delivery and in London it was fixed for March delivery at 33.06 US Dollars on Friday.

According to Dr. Mina, besides the Iraqi crisis, the continuation of the exceptional cold winter in America and Europe and the strike which has paralysed oil exports from Venezuela, one of the US main suppliers of crude, are other reasons explaining the increase in oil prices.

"As we are approaching the end of the winter period and as the situation in Venezuela is gradually returning to normal, if the American attack on Iraq is of lightening type and ends quickly in toppling Saddam within two, three weeks, the price would go up for few dollars, to come down quickly to around 22 to 25 US Dollars", he said.

But if the war last longer, exceeding a month, then the price can shoot to up to 50 US Dollars and more. But even in this scenario, the price would come down once the war is over and a new government is installed in Baghdad", he added.

In any case, Dr. Mina predicts oil prices dwindle to below 20 Dollars once the Iraqi crude reaches the market. "The Iraqis are determined to increase their output to as much as they can and they have the possibility to reach the 5 to 5 millions barrels per day in a two, three years time", he said. ENDS IRAQ WAR AND OIL 15203