BAGHDAD – Saboteurs attacked an oil pipeline in southern Iraq over the weekend, sending up pillars of smoke and bringing a slowdown in supply. It was by no means an isolated incident.
Another pipeline 150km (93 mi.) north of the southern port of Basra was attacked. Yet another was set ablaze in the desert region Nahrawan 30km (19 mi.) east of Baghdad.
No reliable figures are available, but Iraqi and U.S. sources say there have been more than 100 attacks on oil infrastructure including pipelines, administrative offices, offshore facilities and even trucks carrying oil since the U.S.-led coalition forces invaded Iraq in March last year.
Containing and countering these attacks has become a priority for Iraqi officials and their U.S. backers. Oil export is now the only source of income for a country with about 50 percent unemployment, and that is about $100 billion in debt.
Officials say the attacks have not reduced exports. Before the war last year, Iraq produced about 2.5 million barrels per day (bpd) and exported about 1.8 million bpd. It is said to be maintaining that level of exports. The global requirement this year is around 82 million bpd.
"It is very much a system," Norm Szydlowaski, a senior oil consultant appointed by the U.S. administration, told IPS. "There is some ability to adjust, bring the ships a bit later, keep them a bit longer; there is some ability through storage to collect volume while we are waiting to repair."
The oil industry appears geared to working around disruptions. "It is really important to the industry to try and do whatever it can, be as agile as it can, use tanks or alternate lines or means of transportation," Szydlowaski says.
But the security situation does mean that the oil ministry is unlikely to meet its target production of 3 million bpd by the end of the year.
During the course of the invasion last year, Saddam Hussein’s regime put on fire seven of Iraq’s estimated 1,500 oil wells, a number far smaller than U.S. officials had earlier estimated. The looting and sabotage after the invasion has accounted for much of the damage to the oil production system.
Officials have been working hard to protect the 7,000km (4,350 mi.) pipeline system in order to steady production and export.
Oil wells feed three major refineries in Basra, Baghdad and in Baiji northeast of the capital. Improved efficiency in these refineries has helped meet growing local demand, officials say.
Most of the oil comes from the southern oilfields. About a third comes from oilfields around Kirkuk north of Baghdad. The Kirkuk pipeline to the Turkish port Cehan has remained mostly closed as a result of repeated attacks. The pipeline passes through the "Sunni triangle," a group of small cities north of Baghdad where support for Saddam Hussein is still strong.
But pipelines and even an offshore facility have been attacked in the south around Basra, Iraq’s second biggest city.
"When we looked at the attacks on the network pipeline, we saw two separate types of attacks," Ibrahim Bahrul Uloom who was oil minister until June, told IPS. "There was the stretch in the Kirkuk area, and then there was an area in the south that is controlled by an anti-government tribe, and there were 10-11 attacks just from that area."
Uloom says the government of Prime Minister Iyad Allawi has attempted negotiations with this tribe and others targeting the pipeline system but acknowledges that the solution lies elsewhere.
"You can talk to this tribe and that person for now," he said. "But the real solution is to establish security in the country."
The government has put together a 14,000-strong force to guard pipelines and facilities. Uloom says the plan until he left the government two months ago was to double the force.
Szydlowaski says that under such circumstances "it has been pretty amazing that the ministry has managed to reach and maintain this level of production." But big investments will be needed to maintain and upgrade the system, he says.
"In terms of immediate needs, it is difficult to say which category [needs more help] and how much money [it will cost], but all in all the budget that the ministry of oil is looking at is roughly $700 million to $800 million for 2004," he says. "That includes some construction, rehabilitation projects, some security, some chemical operations – and the money needs to be spent efficiently because there is a lot to do."
The oil ministry’s aim to produce 5 million bpd by 2010 will require several billions of dollars of investment. The ministry is not sure if it can secure that. Oil ministry sources say the Coalition Provisional Authority that controlled Iraq until June produced only half the promised billion dollars for the oil industry.
Iraqi officials are looking now to investment from multinational oil conglomerates. The ministry has signed several memorandums of understanding with major oil companies. "I think that influence of outside companies and let’s say experts in refining or reservoir engineering is growing," says Szydlowaski. "There is an increasing outside participation."
That participation has been cautious so far because of the security situation, he says. "There is not as much interaction as I would have liked, but it will come. There is tremendous interest in Iraq."
