Iraq Fadhila Party blames Oil Ministry

Aug. 2, 2007 at 1:06 PM

BAGHDAD, Aug. 2 (UPI) -- Iraq's Fadhila Party says the country's oil sector is in "crisis" and lays the blame on the oil minister.

Basim Sharif, a member of Fadhila's parliamentary delegation, said Oil Minister Hussein al-Shahristani has destroyed the oil industry in Iraq and caused the fuel crisis. The Fadhila Party has withdrawn from Prime Minister Nouri al-Maliki's governing coalition.

"The Ministry of Oil under the leadership of Shahristani has not made any improvement," said Sharif, the Al Mashriq newspaper reports. "Mr. Minister justifies this crisis under the excuse of the security situation and that he has no time to develop the oil products."

Iraq suffers from a lack of transportation, heating and cooking fuels, despite controlling the world's third-largest reserves of oil. It produces around 2 million barrels per day and exports more than three-fourths of it. Iraq is a major importer of fuels, spending $2.6 billion last year, according to the U.S. Government Accountability Office. The Parliament recently approved a law enticing private companies to build refineries in Iraq as a measure to reduce the fuels drought.

Iraq's oil sector faces an onslaught of problems. Smuggling is rampant and is taking billions from the federal government. Attacks on the infrastructure and personnel are regular, affecting the northern oil sector most. And Iraq is currently undergoing a major shortage of electricity; without power, refineries can't operate.

And although more than $10 billion is allocated to invest in the oil sector, only a portion has been actually spent. This is for many reasons, including a lack of administrative capacity to put the money in motion, fears of being accused of graft and severe violence countrywide.

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