Global Policy Forum

The United States plans to secure Iraqi oilfields if it invades and is looking into the possibility of ramping up oil production beyond the U.N. oil-for-food program to pay for post-war reconstruction, Bush administration officials said on Sunday. "The oilfields are the property of the Iraqi people," Secretary of State Colin Powell told NBC's "Meet the Press."

"And if the coalition of forces goes into those oil fields, we would want to protect those fields and make sure they are used to benefit the people of Iraq and are not destroyed or damaged by the failing regime on the way out the door," he said. Revenue generated from the oilfields would be used "in accordance with international law and to benefit the people of Iraq," he added.

Preparing for an Iraq without President Saddam Hussein has become an urgent priority as the Bush administration nears a decision on whether to take military action to topple the regime to eliminate its alleged weapons of mass destruction.

Administration officials say they plan to keep the United Nations oil-for-food program running, at least temporarily, to ensure that post-invasion oil dollars are spent on the country's basic needs.

The Bush administration is considering whether it can, under international law, increase Iraqi oil production beyond the oil-for-food program. Proponents say the extra money that could be generated would be used to expedite reconstruction efforts in Iraq. "It is an option that is being researched," a U.S. official said. "The question is how much further can you go legally."

The administration is carefully weighing how oil policy in a post-Saddam Iraq might affect oil prices, officials say. Its decision could have implications for the fragile global economy.

Increasing Iraqi oil production may help Western oil-consuming nations, including the United States, by lowering oil prices. But it could hurt key U.S. oil-producing allies, such as Saudi Arabia and Russia, by reducing their revenues from oil sales. Iraq sits on top of the world's second largest oil reserves, but war and a decade of sanctions has withered its oil infrastructure and official exports.

A recent report by the James Baker Institute at Rice University and the Council on Foreign Relations estimated it would take $5 billion to bring the Iraqi oil industry back to pre-1990s production levels, in addition to $3 billion in annual operating costs.

The current phase of the oil-for-food program, approved earlier this month, runs until June 3. The Security Council will need to do nothing, in legal terms, to keep it running until then, a U.N. official said. It would take a Security Council vote to cancel the program before June 3 even if there is a war and a regime change in Iraq, the official said.

Officials say keeping the program running during and after a war makes sense because the food warehouses and distribution systems that are needed are already in place.

The State Department recently hosted a meeting of Iraqi opposition members who discussed the future of Iraq's oil and energy sector in a post-Saddam era. Analysts have said international oil companies like Exxon Mobil, BP, and Shell would want to take part in any rehabilitation of the country's oil industry.