Iraq awards Thai rice, oil firms crude quotas

Iraq awards Thai rice, oil firms crude quotas

BANGKOK (Reuters): Iraq has rewarded a Thai rice exporter, a steady shipper of rice to Iraq under a United Nations food for oil program, with a quota for the import of three million barrels of Basra light crude oil.

It also granted state-owned Petroleum Authority of Thailand (PTT) with a quota for one million barrels of similar crude.

The two firms were offered the oil at normal market posted prices without the additional premiums they would have to pay in the open market, PTT said.

Chaiyaporn Rice Co and PTT said on Monday that Iraq had given them the quota to buy the crude within the first half of 2000.

"We have (a) long business relationship with Iraq dating back about 20 years. We have been its supplier of rice and other commodities," Paiboon Kuansongthahe, a senior executive at Chaiyaporn, told Reuters.

He declined to disclose terms for the crude offered but said Chaiyaporn would resell it to refineries in the Far East.

Chaiyaporn was now shipping 80,000 tons of 10 percent white Thai rice to Iraq between December and February.

The rice was being shipped to Iraq under the UN program covering the cash-strapped Middle East country's food imports.

"The current shipment is part of the December 17 United Nations resolution which covers a six-month period from last month," Paiboon said.

Iraq bought 214,983 tons of Thai rice in 1999, up from 160,150 tons a year earlier.

Surong Bulkul, senior executive vice president of PTT, told Reuters his company also obtained the Iraqi crude as a goodwill gesture from Iraq.

"This represents a favorable government-to-government gesture toward Thailand. We plan to import the crude in one single shipment in February because Iraq has a reasonable surplus at this time," he said.

Iraq offered the crude oil to PTT and Chaiyaporn at the normal market posted price, which would enable the Thai oil firm to save a premium of about 30 U.S. cents per barrel it would have to pay in the open market, Surong said.

Earlier the Thai foreign ministry statement said PTT would save about $300,000 in crude import bills because of the special quota.

Surong said: "Iraq offers the same direct sale terms to countries that it views politically friendly.

"China, Malaysia and Vietnam have received bigger Iraqi quotas than us because of their more friendly voting records on past U.N. sanctions than the West."

He believed Chaiyaporn had resold its Iraqi quotas in the international market.