WASHINGTON - The United States plans to run Iraq's oil industry until an Iraqi interim authority can be formed to take it over, sources familiar with the evolving plan said on Friday.

It is uncertain how long the United States would operate Iraq's oil industry, the country's main source of revenue. U.S. officials say they want to turn over Iraqi ministries to Iraqis as quickly as possible.

A U.S. soldier from the 173rd Airborne Division, guards oil facilities in the oil-rich northern city of Kirkuk, April 11, 2003. The United States plans to run Iraq's oil industry until an Iraqi interim authority can be formed to take it over, sources familiar with the evolving plan said. Photo by Nikola Solic/Reuters

"The whole purpose is to transition all these ministries to the Iraqi Interim Authority as quickly as possible. The oil ministry is one of them," said one official.

The U.N. oil-for-food program is continuing under a new U.N. resolution, using oil revenues to pay for humanitarian assistance for the Iraqi people.

The Defense Department is considering putting in place an advisory board of former U.S. oil industry executives to help run Iraq's oil industry, the head of which is likely to be Philip Carroll, a former chief executive of Shell Oil Co., sources said.

Vice President Dick Cheney said on Wednesday that Iraq's oil production could rise as much as 50 percent from 2002 levels by the end of the year if the country is given outside help in restoring its fields' capacity to pump crude.

Last year, Iraq was producing about 2 million barrels of oil per day, down from a high of about 3 million barrels in 1988, according to the U.S. Energy Department.

Even though the country will need outside help, Cheney said Iraqis will have to "make decisions on how much they want to reinvest" in their oil sector.

The country controls more than 112 billion barrels of oil, second only to Saudi Arabia in proven reserves.

Sketching out a postwar scenario now that Iraqi President Saddam Hussein appears to have lost power, Cheney, a former oil company executive, spoke of "an organization to oversee the functioning of their oil ministry."

That body, he said, "will be composed primarily of Iraqis. It may have international advisers from outside."

Does the United States want Iraq to remain in OPEC?

"It will be up to their government to decide. Our position is we have no position. It's up to the Iraqi people," said one U.S. official.

©2003 Reuters Ltd

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