Carolyn Koo
Reuters
June 18, 2004

New York: Exxon Mobil Corp. and ChevronTexaco have received subpoenas from a federal prosecutor regarding the U.N.-run oil-for-food program in Iraq, the two largest U.S. oil companies said on Friday.

The office of the U.S. Attorney for the Southern District of New York declined to comment on whether it has opened a probe of the program.

The U.S. Congress, the Iraqi government and the United Nations are already looking into allegations of corruption in the program.

A spokeswoman at Exxon’s refining and marketing headquarters in Fairfax, Virginia, said the subpoena requested documents related to the oil-for-food program. “We are responding appropriately,” she said.

She had no further comment.

San Ramon, California-based ChevronTexaco received a subpoena, which is a request for information, for the same matter and is also cooperating, according to a company spokesman.

Since the fall of Saddam Hussein last year, documents have been released that indicate bribes and kickbacks were paid to individuals and contracts were skimmed in the now-defunct $67 billion oil-for-food program.

The program began in December 1996 and was meant to ease the impact of 1991 Gulf War sanctions on ordinary Iraqis. The program allowed Iraq to sell oil and buy humanitarian goods under U.N. supervision.

U.N. officials said they believed the subpoenas were the first indication that the federal prosecutor’s office might be looking into the program.

During the period the oil-for-food program was running, the United States was indirectly the biggest purchaser of Iraqi oil, consuming about two-thirds of Iraqi crude exports and buying the oil through middlemen who dealt directly with Baghdad.

Exxon Mobil, the world’s largest publicly traded oil company, was a big buyer of Iraqi crude until the spring of 2002, when U.S. corporate officials came under pressure for buying crude that was widely known to be supplying cash to Saddam Hussein’s regime with a per-barrel surcharge.

It refined an average of about 90,000 barrels a day of Iraq’s crude in 2001, according to the U.S. Energy Information Administration. ChevronTexaco was the biggest U.S. buyer of Iraqi crude, averaging about 135,000 barrels per day in 2001, according to U.S. government figures, and continuing to buy after Exxon Mobil stopped.

It continued to buy until the war began, purchasing an average of 150,000 barrels per day of Iraqi crude in March 2003.

Shares of Exxon were up 14 cents at $44.91 and ChevronTexaco was up 81 cents at $93.59 in afternoon trade on the New York Stock Exchange.

Additional reporting by Irwin Arieff at the United Nations and Bernard Woodall in New York.