Iraqi oil again

["Devine, James" <jdevine@xxxxxxx>]

Title: Iraqi oil again

www.nytimes.com <http://www.nytimes.com>
Widespread Looting Leaves Iraq's Oil Industry in Ruins

By NEELA BANERJEE&&BASRA, Iraq, June 6 Standing under the merciless sun outside his office, surrounded by employees shouting angrily about pay, Jabbar Ali al-Leaby, the director general of the South Oil Company, lost the little patience he had left.

"Be satisfied with what you got," he told the men. "Do you know what I went through to get even this money for you?"

It was only three hours into the workday, but Mr. Leaby's frustrations started, as they do every morning, when he arrived around 8 to the lone refurbished office in a complex of buildings so thoroughly ransacked that birds dart through the upper stories. Employees of South Oil, Iraq's leading oil producer before the war, are now idle because looting has brought most of the company to a standstill.

"The other day, there was looting and sabotage at the North Rumaila field," Mr. Leaby said. "The day before that, at the Zubayr field. For three months, I've been talking, talking, talking about this, and I'm sick of it."

This is now the state of the Iraqi oil industry, custodian of the world's third largest oil reserves an estimated 112 billion barrels and the repository of hope for the United States-led alliance and the Iraqi people themselves. Money from oil, the Bush administration has said repeatedly, will drive Iraq's economic revival, which in turn will foster the country's political stability. Many Iraqis agree.

Yet from the vast Kirkuk oil field in the north to the patchwork of rich southern fields around Basra, Iraq's oil industry, once among the best-run and most smartly equipped in the world, is in tatters.

Looting, sabotage and the continued lack of security at oil facilities are the most recent problems the industry and its American overseers must address in order to get petroleum flowing again, especially for export.

Some Iraqis believe that the looting is deliberate sabotage by people still loyal to the Baath Party rule of Saddam Hussein. Whoever is behind the pilfering and destruction, they have compounded the problems accumulated over 12 years of United Nations sanctions. And the expertise needed to get the oil flowing again often resides with oilmen now tainted by their past association with Mr. Hussein.

The interim oil minister, Thamir Ghadhban, and his American advisers are trying to purge the industry of senior Baathists. Yet neither the Americans nor the new minister have proposed a new structure for the industry, which might make it easier to argue that new people are needed. For now, they are working the old state-run model under which the ministry oversees the two companies Northern Oil and South Oil and other agencies in charge of exploration, pipelines and other equipment and exports.

"The sector itself is in poor shape after years of sanctions, and the effects will take time and money to reverse," said Raad Alkadiri, a specialist on Iraqi oil from PFC Energy, a Washington consulting firm, who recently visited Iraq.

Security

Army of Looters Like Crawling Ants

The Oil Ministry, supported by the Americans, has set an aggressive schedule for the industry's revival. By the end of the year, Mr. Ghadhban has said, Iraq should be pumping about three million barrels a day, which would slightly exceed its prewar output.

Over the next two weeks alone, daily production should almost double to 1.4 million barrels a day, Mr. Ghadhban said in a recent interview, with one million barrels a day going to exports. Most industry experts say that is too optimistic, and that overall production is likely to total at best one million barrels a day by the end of this month.

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Jim Devine jdevine@xxxxxxx &  http://bellarmine.lmu.edu/~jdevine