WASHINGTON, June 15 (UPI) -- Since President George W. Bush declared "mission accomplished" in Iraq on May 1, 2003, the U.S.-led Coalition Provisional Authority sought to bring Iraq's oil infrastructure up to speed as quickly as possible. Despite the massive U.S. ground presence, damage by incessant insurgency attacks continues.
Serious damage to a pipeline providing petroleum to Basra's maritime oil terminal on the Persian Gulf severed oil exports on June 14. This is the second attack on Basra's oil terminal in just over a month. Basra is currently responsible for 90 percent of Iraqi exports. Repairs could take 10 days, costing $60 million a day in lost oil revenue until oil exports resume. Attacks sharply decreased production to less than half a million barrels per day from 1.6 million. Petroleum production stood at 2.1 million bpd in May, according to the International Energy Agency.
The U.S.-led coalition is up against assassinations, insurgency attacks throughout the country, and kidnappings. Ghazi Talabani, head of security for Iraq's northern oil fields in the oil-rich city of Kirkuk, was the most recent casualty, killed Tuesday.
"More than 200 million dollars has been stolen out of the pockets of a sovereign Iraqi government through the loss of oil revenues resulting from attacks to pipelines," said Iyad Allawi, Iraq's newly appointed prime minister. Over the past seven months, Iraq had 130 attacks on its oil pipelines and lost over $200 million, said Allawi. Oil revenues accounts for more than 90 percent of Iraq's income.
Iraq has the world's second-largest known oil reserves, with about 115 billion barrels. Iraq never produced to full capacity, and production was significantly reduced as a result of 1980-1988 Iran-Iraq War, the 1990-911 Persian Gulf War, and subsequently 10 years of harsh sanctions imposed by the United Nations under which Iraq could sell its petroleum only under the U.N.'s oil-for-food program.
Attacks on Iraq's pipelines began shortly after the cessation of major hostilities. "These saboteurs are not freedom fighters, they are terrorists and foreign fighters, opposed to our very survival as a free state," said Allawi.
Insurgents are constantly blowing up Iraq's 4,000-mile oil pipelines, sometimes as frequently as three times a week. Insurgents damaged two pipelines on June 9, one linking the oil-rich city of Kirkuk with Turkey's Ceyhan port on the Mediterranean and the other linking Bayji (125 miles north of Baghdad) to a local power station. These attacks occurred the day after the Coalition Provisional Authority prepared to transfer control of Iraq's oil ministry and petroleum assets to the new interim government of Prime Minister Allawi. These attacks typify the situation in Iraq.
Angered by power outages and disruptions of oil supplies to power plants, Allawi said, "I call on all Iraqi patriots to be vigilant. It is our people that are sitting in the dark and not our occupier."
The June 9 attack, which closed the 400-megawatt station, resulted in a 10 percent cut on the national power grid as demand for electricity increased due to Iraq's summer heat.
Collateral effects of the attacks include a loss of electricity and water pumping, affecting the quality of life of average Iraqis. Electric shortages increase the difficulty for the people to cook or keep cool, while water shortages affect sanitary conditions.
The attacks are thwarting U.S. efforts to maintain an adequate supply of electricity while restoring normalcy to Iraq. The fires produced by attacks frequently cause devastating damage to Iraq's oil pipelines. The insurgents are seeking to cripple reconstruction efforts and cause fuel shortages in energy-rich Iraq.
One month before the war's onset, Saddam Hussein invited foreign oil companies to the country in February 2003 for a conference on developing its oil fields when the country still did not have a timetable for resuming oil exports via its Kirkuk pipeline. At the time, the estimated cost for rebuilding the oil sector was $50 billion; Iraq was exporting 1.6 million barrels per day from its Basra port under the U.N.'s oil-for-food program.
After the U.S. victory in Iraq, insurgents opposed to U.S. occupation struck softer targets in an attempt to undermine U.S. credibility by attacking Iraq's oil infrastructure, thereby crippling reconstruction efforts.
Following the defeat of Saddam Hussein and conclusion of "major hostilities", assaults immediately began in June 2003 against Iraq's pipelines, targeting the Kirkuk pipeline, followed by explosions at Bayji, a gas pipeline near Hit (a city about 95 miles northwest of Baghdad), a gas pipeline in the town of Abidiyah Gaarbiga, a gas pipeline near the Syrian border in western Iraq, and an oil pipeline near Barwanah, which carries petroleum to al-Dawrah refinery in Baghdad. In an increasingly dreary scenario, attacks like these occur monthly.
Several months after President Bush declared victory, the coalition began repairs and plans for expanding Iraq's oil infrastructure. Iraq began renovating its oil pipeline going to the Saudi port of Damman on the Arabian Sea, according to a spokesperson for the Coalition Provisional Authority in September 2003.
Like the Kirkuk pipeline, the Saudi-Iraqi pipeline was closed after the 1991 Persian Gulf War. Japanese, French and U.S. companies began pipeline repairs ruined by corrosion and deterioration.
The provisional government used the reconstruction of Iraq's oil infrastructure in an attempt to mend its relations with Iran. Iraq invited Iran in April 2004 to build a joint oil pipeline between the two nations linking Basra in southeastern Iraq to the port of Abadan in southwestern Iran, said Asem Jihad Iraq's oil minister.
Iraq would use the pipeline to ship Iraqi petroleum to Iran's Badan refinery. Jihad added that decisions to build the Basra-Abadan pipeline would be in Iraq's national interest. Iraq received the approval of the coalition.
Iraq currently lacks accurate statistics on its oil exports, but potential revenues are immense. Ahmad Roshanfekr-Rad, a spokesman for Iran's National Energy Committee, told the Fars News Agency that Iraq earns no more than $30 million per day from oil revenue but does not exceed 1 million bpd. Roshanfekr-Rad also argued that the Coalition Provisional Authority's accounts of Iraqi revenues are largely false and inaccurate. He added that Iraq is not exporting to capacity while oil revenues are less than the cost of U.S. military operations.
After June 30, when sovereignty is transferred to the Iraqi people, Iraq's oil ministry will be independent while a U.N. advisory board will monitor oil exports.
Now that Iraq has a new prime minister, will he be able to maintain accurate data on Iraq's oil profits until the transfer of power on June 30? After June 30, will the new government be able to keep accurate accounts? Critics of U.S. occupation argue that when the United States hands sovereignty to the Iraqis, they will be able to manage their own internal affairs better than the U.S. administration. As the oil infrastructure increasingly comes under Iraqi management, it remains to be seen whether attacks will lessen, much less cease.
