Good, not so bad news from Iraq oil

BAGHDAD, Jan. 11 (UPI) -- Iraq ended a deadly year by steadily increasing oil production, but about $1.4 billion in revenue was taken by the still booming black market.

Around 21.5 million barrels of oil were reported pumped but not accounted for in exports, storage facilities or refineries, according to the global energy information firm Platts.

Smuggling has been a presence in Iraq for decades, including the green light by Saddam Hussein. Gangs, militias and insurgents have capitalized on both the crude and fuels black market with high oil prices, a regional need for refined products and subsidies for fuels.

In 2006, however, an estimate 44 million barrels were unaccounted for.

Iraqis faced the deadliest year of the occupation in 2007, though there was a slight drop in violence at the end of the year.

The oil sector also outperformed its recent past. Oil production had averaged just less than 2 million barrels per day since 2003, but Platts reports December 2007's daily average was 2.48 million barrels per day.

That's 73,000 more than November, raising the annual average to about 2.18 million bpd.

The uptick was mostly due to enhancements of security and repairs of the northern pipeline, which exports oil to Turkey.

It also feeds Iraq's largest oil refinery, in Baiji. "There are three sources that feed the terrorists and armed groups. The first source is the oil refineries in Baiji," said Rashid Flayih, Salah al-Din province's Samarra operations commander, the al-Adala newspaper reports.

Northern oil fields increased by 14,000 bpd in December from the month before.

The southern fields, which hold most of Iraq's oil, increased from 1.88 million to 1.93 million bpd over the same timeframe.