Reuters, 06.10.03, 9:53 AM ET LONDON, June 10 (Reuters) - War in Iraq showed oil markets can function in a crisis thanks to OPEC's creation of surplus capacity, but the cartel's actions have lost it market share and its influence may wane anyway, according to energy major BP. "No oil consumer faced a lack of availability," said BP's <BP.L> Chief Economist Peter Davies on Tuesday. "There proved to be no need to release emergency oil stocks," he said at a presentation. "In a sense the system works, and has now been tested by what can probably be called a normal crisis." Davies was speaking at the release of the world number three oil company's annual statistical review of world energy trends, and as OPEC ministers gathered to discuss production quotas at a meeting in Doha, Qatar. In the early months of 2003 supply disruptions in Venezuela and Nigeria and a cold northern hemisphere winter conspired with the wartime loss of Iraq's output to tighten supply. But OPEC's ability to fill the gap ensured that prices tumbled $10 a barrel from their $40 highs before the first shot was even fired, and supplies were maintained without market panic. This was largely thanks to the deliberate policy of Saudi Arabia and others of building in, then releasing, spare capacity, Davies said. In 1999 a crude glut took oil prices down to $10 a barrel. This hurt OPEC members' economies, and galvanised the cartel to rein in production to force prices back up. It has succeeded in reaching its target $25 a barrel each year since 2000 by keeping back the very capacity it was able to release in the Iraq war.

MARKET SHARE But Davies said OPEC's own actions will cost it market share -- and therefore market influence -- as supplies from the Caspian, deep water Atlantic basins like the Gulf of Mexico and offshore Angola, and Canadian oil sands fight for what little demand growth is on offer. Output growth in Russia alone has satisfied global demand growth for the past three years while OPEC's total ouptut has declined for three of the last four years and is at its lowest since 1995. OPEC cut output by 1.87 million barrels a day in 2002 to address a looming glut, but oil production outside OPEC grew by 1.45 million barrels a day in the same year. "I think it is unlikely OPEC is going to be able to access substantial growth and risks losing market share over the next several years," Davies said. "The broader oil market picture is one of slow world oil consumption growth but strong supply growth; in other words, weakening fundamentals." Some ministers at Wednesday's OPEC meeting share Davies' view that the strong prices prevailing for the past three years may evaporate as Iraq gears up to renew exports, but analysts expect them to hold quotas unchanged this time.

The Herald Sun By Ian McPhedran June 11, 2003

SUSPECTED terrorist sympathiser Bilal Khazal will almost certainly lose an appeal to get his passport back. Mr Khazal, a Lebanese-Australian, has strong links to numerous Islamic extremist groups including al-Qaeda and Jemaah Islamiyah, the group behind the Bali bombings.

Authorities are unsure whether the Sydney man has trained with al-Qaeda.

About six other Australians with possible terrorist links have had their passports revoked. Two of them have lost appeals to the Administrative Appeals Tribunal.

ASIO argued strongly for the passport bans to stand and it is opposing Mr Khazal's appeal.

His passport was revoked after ASIO provided a security assessment to the Federal Government just before he planned to leave on an overseas trip.

Foreign Affairs Minister Alexander Downer cancelled the passport early last year, but Mr Khazal has been a "person of interest" to ASIO for much longer than that.

"He is someone we have been aware of since well before the Sydney Olympic Games," a government source said.

ABC TV's Four Corners on Monday quoted a CIA report naming Mr Khazal as a supporter of al-Qaeda.

The report was prepared for authorities in the Philippines and was compiled from material provided to the CIA by ASIO.

ASIO has had him under surveillance for several years and is closely monitoring the activities of the Islamic Youth Movement in Sydney. Several IYM members, including

Mr Khazal, are of "real interest" to authorities.

Mr Khazal, a strong supporter of Osama bin Laden, runs an Internet site for the IYM. According to the CIA report, he was involved in planning attacks in the Philippines and Venezuela.

Sydney Lebanese community leader Keysar Trad said Mr Khazal was not a security threat.

"He is abrupt, he is abrasive, he's just someone who's not generally a nice person," Mr Trad said. "I have not seen anything from the group that he associates with that would pose any risk to the security of Australia."

Mr Khazal worked as a baggage handler at Sydney airport's international terminal before March 2000, but he had been off work with a bad back for some time before that.

This year's federal Budget provided funds for security screening of people working on the "air side" of airport terminals including baggage handlers.

Deputy Prime Minister and Transport Minister John Anderson said airport staff would now face the toughest security checks in the world.

"As I've announced, people who hold cards - airport security cards - will now all face the toughest and most stringent background checks of any country in the Western world, including checks for political involvement and attitude," Mr Anderson said.

Authorities cannot take stronger action against him because he had not broken any laws.