Secretive Swiss trader links City to Iraq oil scam

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Secretive Swiss trader links City to Iraq oil scam
By Peter Koenig
Special report: Next month’s UN report will drag British-based miner Xstrata into the controversy over surcharges paid to Saddam



THE oil tanker Artemis slipped its mooring in the Turkish port of Ceyhan on November 18, 2000, carrying 100m barrels of Iraqi crude under the United Nations oil-for-food programme.
The tanker headed for America to sell the shipment at a price pegged to West Texas crude.

It stopped off in Omisalj, a Croatian port on the island of Krk and the oil was put in a storage facility owned by the Croatian petroleum company INA. The diversion has since become a matter of dispute between the UN and the cargo’s owner, a Swiss commodities firm called Glencore.

The UN said Croatia was the final destination for the shipment and asked Glencore to pay it pegged to European rather than American prices. The difference was $3m and Glencore UK, based in Mayfair, London, sent the UN a cheque to cover that amount. Glencore said last week that Croatia was never meant to be the oil’s final destination. It said there was a misunderstanding due to the UN’s fuzzy rules on Iraq oil-for-food shipments.

All this is of more than academic interest to the City. Next month the UN will report on companies buying oil from Saddam Hussein’s government. The odds are it will mention Glencore. This will not only focus attention on Glencore, but also drag the FTSE 100 mining company Xstrata into the scandal, because Glencore controls 40% of it.

http://www.timesonline.co.uk/newspaper/0,,176-1795993,00.html