Report: Iraq oil production remains below prewar level

Insurgents have come up with new ways to pierce Iraq’s vital oil industry, keeping the daily flow below prewar levels despite an emerging protection force and a reduced number of attacks.

New numbers this week from the special inspector general for Iraq reconstruction (SIGIR) show oil production at 2.18 million barrels per day, 400,000 below 2003 prewar levels.

The World Bank estimates that just to stay at the current level, Iraq will need to invest at least $1 billion in additional revenue each year. The Iraqis want to achieve a 2.3 million-barrel-per-day rate.

The Bush administration once projected that Iraq would be rebuilt principally from Iraqi oil revenues, but that prediction has fallen by the wayside. U.S. taxpayers have funded more than $30 billion in reconstruction costs, plus tens of billions of dollars for military operations.

“Attacks on oil infrastructure remain a serous problem, despite attempts to bolster infrastructure security forces,” said the quarterly report by IG Stuart W. Bowen Jr.

He said a program to train the Oil Protection Force to guard 4,340 miles of pipeline and 340 installations proved “largely unsuccessful.” The Bush administration is now drafting a new defense strategy. The force was supposed to number over 14,000 troops, but today is at 3,400. Some units have been infiltrated by insurgents who provide critical information for plotting attacks.

“Although the number of infrastructure attacks has recently decreased, the complexity of the attacks has increased,” the IG report said.

“Insurgents have become more proficient at targeting critical infrastructure nodes, as well as intimidating personnel who deliver essential services.”

The report gave an example of how insurgents are hindering Iraq’s primary source of income as it tries to build a new democratic nation. On Feb. 1, the enemy attacked a new desulphurization plant in Kirkuk. The Ministry of Oil then reverted to an older plant, which can only produce half of the new plant’s 1 million barrels per day.

Mr. Bowen said the industry is plagued not only by sabotage, but also by its dilapidated state during Saddam Hussein’s rule, by corruption and by uncertainties over what laws govern production.

Bush reconstruction officials say Mr. Bowen should not use the 2.58 million barrels as the benchmark production rate before the war. They say Saddam ramped up production in 2002 and ‘03 as war neared.

The officials, who asked not to be named, said it would be more accurate to use an average number from production in the late 1990s and 2000s, which would show a lower daily flow and make today’s number appear more impressive.