The agreement signed last week between Syria and Iraq for reopening the oil pipeline between the two countries was a political statement rather than a commercial deal. The rapprochement between rival Ba'ath Party regimes in Damascus and Baghdad was timed to complement negotiations held in Paris on "strategic partnership" and commercial co-operation between Syria's President Hafez Al Assad and President Jacques Chirac of France. During their talks, Mr Assad was able to claim he could use his influence to France's benefit with both Lebanon, now virtually a Syrian mandate, and Iraq, developing into a Syrian ally. The bloc of Lebanon-Syria-Iraq is particularly attractive in terms of political influence and investment opportunities.
France is eager to reassert itself both politically and economically in the Middle East and Mr Assad fuelled French ambition by cultivating a "strategic partnership" with Paris and encouraging commercial deals with French companies on a variety of projects. These range from upgrading Syrian railroads to constructing a new oil refinery and export facilities at Banias which would, ultimately, handle Iraqi crude exports. Paris has been peeved by the exclusion of French companies from lucrative defence contracts concluded by US and British firms with the Gulf states following the 1991 war against Iraq. Having put forward a firm bid for developing a "giant" oilfield in the Majnoun marshes of southern Iraq, France is determined not to be left out when economic sanctions on Iraq are lifted.
France and Russia - which has signed a contract for the exploitation of another southern Iraqi oilfield - have been pressing the UN Security Council to lift sanctions as soon as possible. They have done so with good reason. Before the 1991 war Iraq had accumulated debts of $1 billion with France and $6 billion with the former Soviet Union. Both Paris and Moscow expect to recoup their losses once Iraq is permitted to develop its untapped energy potential. Implementation of the agreement on the pipeline would take "a long time and a lot of money which neither side has", an authoritative oil source told The Irish Times. It would cost $100 million to repair facilities in the Iraqi sector of the old Trans-Arabian Pipeline, Tapline. This has a capacity of 300,000 barrels a day and stretches from the Iraqi Kirkuk oilfield to the Syrian export terminal at Banias.
Additional heavy outlays would be required to render the Syrian sector of the pipeline fit for service and to provide storage facilities for crude and loading at Banias, the source said.
He contradicted the confident assertion of the Iraqi Oil Minister, Mr Amir Muhammad Rashid, that the 1996 deal on limited oil exports reached with the UN included the Banias terminal as well as Turkish and Iraqi terminals. "A new Security Council resolution will have to be adopted before Iraq can export through Syria," the source stated.
He also said an investment of $1.5 billion would be needed to lay a projected new pipeline capable of carrying 1.4 million barrels a day. Diplomats from Iraq and Syria are examining the possibility of an early renewal of relations, suspended since 1982 when the pipeline was closed after Damascus sided with Tehran in the 19801988 Iraq-Iran war. The aim is fundamentally political: to counter the military alliance between Israel-Turkey-Jordan which worries both Damascus and Baghdad.