"It appears as though the damage to the southern oil fields is not too bad," said Bill Farren-Price from the Cyprus-based Middle East Economic Survey (MEES).

"If that is so, it should be possible to restore most of Iraq's 2.7 million barrels per day (bpd) production in the coming months," he added.

The southern fields, captured on the first days of the war by the coalition, account for more than two thirds of Iraq's production.

The rest is pumped out from the northern fields around Kirkuk that have kept during the war sending some volumes to the Turkish terminal of Cehyan, on the Mediterranean, an indication of little damage done so far to them.

The Kurdish forces said Wednesday they expected to enter Kirkuk without a fight on Thursday or Friday, but conflicting reports suggested forces loyal to Saddam Hussein could still attempt to resist advancing coalition troops and Kurdish peshmerga fighters.

On Wednesday, the pipeline delivered 84,000 barrels to storage tanks in Ceyhan that now hold 8.2 million barrels of Iraqi crude that are waiting for a legal signature to be sold, said Thursday New York's Oil Daily.

"The continuation of the flow seems an indication that at least some of the Kirkuk fields are still producing oil. An assessment of the condition of the fields is possible only after fighting in the north has ended," it added.

In the early days of the war the pipeline was carrying close to its typical 700,000-800,000 bpd, but volumes have dropped since.

But the oil stored in Ceyhan could not be sold during the war as communication with Iraq's state-oil marketer Somo was lost.

"No one would want to load this oil and then discover it was illegal to do so," said Kevin Norrish from Barclays Capital in London.

The UN Security Council agreed on March 28 on resolution 1472 to resume the "oil for food" program suspended shortly before the war, and entrusted UN Secretary General Kofi Annan to spend funds available from past oil sales.

But it sidestepped the contentious issue of whose signature will replace Iraq's on oil sale contracts that finance the purchase of food and medicine under this program designed to alleviate the impact of UN sanctions imposed after Iraq's seven-month occupation of Kuwait in 1990-1991.

Diplomatic wrangling continued on the UN role in post-war Iraq, with Russia and the European Union seeking a greater role for the world body than the United States appears ready to allow.

A US-appointed official, retired General Jay Garner, is preparing to take temporary control of the country. It is yet not known whether it will be his administration that will sign potential oil contracts.

The picture becomes more blurred on the period to follow the current phase of the "oil for food" program, which will come to an end in May.

Will the program be renewed? Will the UN sanctions be lifted altogether now that Saddam is gone? And who will be in charge of the oil sector?

US Vice-President Dick Cheney spoke Wednesday in New Orleans of "an organisation to oversee the functioning" of Iraq's oil ministry, to be "composed primarily of Iraqis" and which "may have international advisers from outside."

Last month, Kellogg, Brown and Root (KBR), a unit of Halliburton, the group formerly headed by Cheney, was awarded a near 900 million-dollar contract to contain oil well fires and restore oil facilities and infrastructure in Iraq.

Figures published in different studies on Iraq's reconstruction put the investment needed to bring production capacity back to the pre-1991 Gulf war level of 3.5 million bpd in the range of three to five billion dollars.

This level could be achieved in two years. Another 30 to 40 billion dollars will be needed to boost capacity to between six and eight million bpd, six to eight years from now, but this would depend very much on global energy needs and quota problems within the Organisation of Petroleum Exporting Countries (OPEC).

Some analysts predict that a post-war Iraq could kill off OPEC if it were to leave the cartel in a bid to produce as much oil as it can outside the quota system designed to maintain prices at between 22 to 28 dollars per barrel.

SPACE.WIRE