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DATE=09/28/00

TYPE=CORRESPONDENT REPORT

NUMBER=2-267208

TITLE=KUWAIT / IRAQ (L-ONLY)

BYLINE=LISA SCHLEIN

DATELINE=GENEVA

CONTENT=

VOICED AT:

INTRO: A United Nations panel has approved a claim of 15-point-nine-billion dollars against Iraq to compensate for losses the Kuwait Petroleum Company incurred in the Gulf War. Lisa Schlein in Geneva reports this is the largest award made for damages since the U-N Compensation Commission was set up at the end of the war in 1991.

TEXT: The 15-member panel was able to achieve consensus on the claim following a compromise hammered out by the U-N Security Council.

Currently, 30 percent of the money Iraq earns from the sale of oil under a U-N sponsored oil-for-food program goes to compensate victims of the Gulf War. Russia and France had indicated they would not approve the Kuwaiti award unless this amount was lowered to 25 percent.

The spokesman for the panel, Joe Sills, says he doesn't know what effect this lower percentage will have on the compensation fund. He says the amount of money depends on the percentage of Iraqi oil sales deposited in the fund and the market value of the petroleum.

/// SILLS ACT ///

You can't tell, because you can't tell what the

second variable will be, which is the price that

petroleum will realize on the market sold by

Iraq. Obviously, it will decrease. And I think

it will effect the larger claims. It will have

a lesser effect on the smaller claims.

/// END ACT ///

Mr. Sills says the next payment to Gulf War victims, amounting to over one-billion dollars, will be paid out next month.

During its three-day meeting, the U-N Compensation Commission examined eight claims, including that of Kuwait. It approved total payouts of more than 16-point-two-billion dollars.

The Kuwait Petroleum Company had originally asked for 21-point-six-billion dollars in damages. Senior legal officer James Loftis says the U-N panel reduced the payment because it believed the company overstated its losses.

/// LOFTIS ACT ///

One relatively minor concern was the amount of

oil that Kuwait claimed it would have refined

overseas. They were unable to demonstrate to

the panel's satisfaction that element or claim

was valid. That was worth about a little over

200-million dollars. The major area of the

claim concerns fluid loss claim ... that

discrepancy results primarily from the panel's

belief that Kuwait's petroleum engineering

consultants overestimated the amount of oil lost

to fires and spills in the aftermath of the war

by approximately 340-million barrels.

/// END ACT ///

So far, the panel has approved 99 percent of the two-point-six-million claims filed. It has paid out more than eight-billion dollars, out of a total award of 31-billion dollars. (Signed)

NEB/LS/WTW/JP