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Politics : Foreign Affairs Discussion Group -- Ignore unavailable to you. Want to Upgrade?

To: Hawkmoon who wrote (97861)	5/10/2003 10:34:38 PM
From: quehubo	Read Replies (3) \| Respond to of 281500

It seems the looters did more damage than just steal some artifacts. Six months is a long time and probably optimistic. Iraq Oil Chief Says Looting Is Hindering Country's Production By Chip Cummins BAGHDAD (Dow Jones) - The newly appointed head of Iraq's oil industry said widespread destruction of oilfield facilities by looters has set back plans to resume large-scale oil production, and he called on U.S. officials to provide more troops to protect fields. The damage threatens to reverse one of the Pentagon's most striking military achievements during the Iraqi invasion. Coalition soldiers and engineers quickly stormed the country's southern oil fields, preventing sabotage by Saddam Hussein loyalists. Later in the war, they secured northern fields with ease and reported very little damage to oil infrastructure across the country, suggesting a relatively quick resumption of prewar production and exports. But Thamir Ghadhban, who U.S. occupation officials picked last week to head the oil ministry, said looting in the weeks after the fighting has significantly degraded infrastructure. In an interview, he expressed frustration that U.S. troops weren't doing more to protect oil infrastructure. "We need security to be enforced, especially for the oil industry," he said. "We want all our operating fields, or [fields] that will be operating very soon, to be guarded," he said. Lt. Gen. David McKiernan, commander of U.S. ground forces in Iraq, addressed security issues generally across Iraq at a news conference Thursday. He said coalition forces would be stepping up security around oil fields, but gave no specifics. Until recently, American military engineers had been predicting a relatively quick resumption of large-scale production. Expectation of a rapid return of Iraqi crude to world markets has been one factor contributing to sharply lower oil prices in recent weeks. Earlier this week, Mr. Ghadhban told reporters Iraq could be pumping about 1.5 million barrels of oil per day in a matter of weeks. He said those estimates were too optimistic given the scale of the looting. He declined to specify new timelines. "After knowing now the situation more clearly from the people who are in the areas, it would be unwise, or premature, to come up with exact production figures at exact dates," he said. He also wouldn't specify when he thought Iraq would be producing again at prewar capacity, but he said he was confident it would be by the end of the year. Oil officials here say Iraq's prewar capacity was near three million barrels a day, though outside estimates suggest production was closer to 2.5 million barrels a day. Iraq is producing about 200,000 barrels per day, far short of the country's domestic demand estimated to be at least 500,000 barrels per day. Shipments of emergency gasoline and cooking oil from neighboring countries started arriving Thursday to help stave off shortages. Other bottlenecks have made oil production more difficult. Without an internationally recognized government, Iraq lacks legal authority to resume exports. That has resulted in brimming storage tanks for oil and other petroleum products, limiting further production. Iraqi and U.S. officials have said despite lingering legal questions, they are considering a quick resumption of fuel-oil exports in order to alleviate storage bottlenecks at refineries. Mr. Ghadhban spent Thursday meeting with oil-industry managers from across Iraq, who reported harrowing stories of looting and vandalism. Looters destroyed a major compressing station at one of the country's largest natural-gas processing plants and put a 70,000-barrel-a-day oil-processing facility in the north completely out of commission. Many pumps for water-injection systems, which are required in some fields to lift oil to the surface, have been destroyed. Mr. Ghadhban had also heard a technical-training facility in central Baghdad was being looted earlier in the morning. A U.S. Army captain assigned to the ministry assured Mr. Ghadhban as they passed in the hallway Thursday he would tell his boss about the problem. "I need more than that," an exasperated Mr. Ghadhban shot back. The damage "is colossal, you know, and I don't want to exaggerate," Mr. Ghadhban said later during the interview. Looking past the current crisis, however, Mr. Ghadhban said he saw no reason why prewar goals to double oil-production capacity couldn't still be met. As part of a long-term development plan, Mr. Hussein's government had said it could boost production to about six million barrels of oil per day. Mr. Ghadhban said Thursday that was still achievable in six years, and sustainable after eight years. Mr. Ghadhban said the ministry's ambitious growth plan called for some two million barrels a day of added capacity from "cooperation" with foreign oil companies. Iraq has negotiated with dozens of oil companies over rights to develop oil fields, but most companies have been stymied from proceeding by United Nations sanctions. "We have always welcomed foreign companies to come and help, and not only to help but cooperate with us, if it's on a win-win basis," he said. U.S. officials named Mr. Ghadhban to head Iraq's oil industry as "chief executive officer," giving him broad latitude to direct the ministry's day-to-day administration. American officials have said they will leave oil policy decisions to the Iraqis. But Mr. Ghadhban and his management team answer to an American-led advisory board, and it is unclear how much real decision-making power he will have before a new Iraqi government is formed. He avoided several politically-charged topics, declining to discuss Iraq's future in the Organization of Petroleum Exporting Countries. He also said he wasn't in a position to know whether prewar development agreements between various foreign firms would be honored by a new government. © 2003 Dow Jones Newswires.