- The Washington Times - Tuesday, April 22, 2003

KIRKUK, Iraq Offices, facilities and homes of the Northern Oil Co. have been so thoroughly ransacked by looters since the collapse of Iraqi dictator Saddam Hussein's regime that the company's employees cannot predict when they can get oil flowing again.

At the Oil Ministry, the only government building that survived looting in Baghdad, officials began talks with U.S. army officers on choosing a new oil minister and resuming production, which was suspended nearly a month ago.

But as the post remained vacant, former Iraqi Gen. Jawdat al-Obeidi, who says he is deputy governor of postwar Baghdad, announced that he would lead a delegation to a meeting of the Organization of the Petroleum Exporting Countries beginning in Vienna on Thursday.

These are dismal days for Iraq's oil industry. In the south, war and sabotage have thoroughly disabled months' worth of oil production. Engineers need to repair well heads damaged by retreating Iraqis and close off nonproducing oil wells to prevent ruptures and maintain pressure in the underground reservoirs.

Plants that separate oil and gas, however, are largely intact, and there has been limited damage to southern pipelines. The Rumeila South oil field, which produced at least 500,000 barrels of crude a day before the war, was one of the first secured by U.S. troops, but repair work there is just beginning.

Experts estimate it will cost about $3 billion to $5 billion over two years just to get production back to levels seen before the 1991 Gulf war. Industry analysts and war planners were banking on crude oil from the relatively undamaged wells of northern Iraq to help stabilize world oil prices, fund the reconstruction of the country and perhaps pay for some of the war efforts.

But widespread looting of the oil facilities has put in doubt any prospect of a quick recovery of the northern fields.

"We cannot get all the workers to come to work now because we have no place to put them," said Adil Qazas, a geologist and high-level official of Northern Oil. "We have no offices. We lost 100 percent of our offices. We have no cars to transport the employees to the sites."

Kirkuk sits on a small sea of oil. Alexander the Great used crude bubbling up from the ground here to make firebombs and vanquish his enemies. According to a local legend, "eternal flames" produced by the gas from the oil have burned on the flatlands for millennia.

"No one can extinguish this fire because it's always hot and always burning," said Abdul Wahab, a geologist and Baba City resident considered an expert on the area's history.

With 430 wells spread over 116 square miles, Baba Gurgur first discovered in 1927 is one of the largest oil fields in the world. Before the war, it produced 600,000 barrels a day, and many experts say it could produce more. It once turned out 900,000 barrels. In the 1960s, one well produced 120,000 barrels a day.

"There are few fields in the world which can produce that much," Mr. Wahab said. "The Kirkuk field is one of the greatest, one of the giant fields of the world, not only of the Middle East."

Nearly 200 spacious bungalows separated by lush gardens and palm trees line the lazy streets of Baba City, a Kirkuk suburb. The old Iraqi Petroleum Company, established by the British to exploit these fields in the 1930s, built the area in 1938 and 1939.

It continued to house northern Iraq's petroleum elite after 1958, when a new Iraqi government nationalized the oil industry. Since Saddam rose to power in the 1960s and 1970s, the highest-level officials of Northern Oil became Ba'ath Party yes men. They fled or disappeared as the U.S.-led forces took control of the area.

Most of the oil ministry staff who attended the discussions on choosing a new minister said that they had come to work on their own initiative.

"We are ready to restart oil production until a new government takes over. Then they are going to decide if they keep us or ask us to leave," one official was quoted by Reuters news agency as saying.

Saddam's oil minister, Amir Muhammed Rasheed, was last seen by journalists at the Doura refinery on March 25, surrounded by burning pits of oil as bombs fell on nearby Baghdad. He is now on a U.S. list of the 55 most-wanted Iraqis.

A strong candidate to replace him is Fadhil Othman, who led the State Oil Marketing Organization before Saddam assumed the presidency 24 years ago, oil officials said. Mr. Othman also used to run the Southern Oil Co.

Thamir Ghadhban, director-general of studies and planning at the ministry, was chosen to liaise between the ministry and the man who says he is now governor of Baghdad, former exile Mohammed Mohsen al-Zubaidi, the officials said.

Mr. al-Obeidi said Mr. Ghadhban will be part of the delegation to the OPEC meeting in Vienna.

Oil industry sources, meanwhile, were quoted by wire reports as saying that U.S. officials are seeking an Iraqi chief executive officer to lead a multinational board of up to 16 to restart oil operations.

"Washington wants to get moving on oil," said one industry expert familiar with the plans. "And they are determined to place an Iraqi as CEO of oil."

This article is based in part on wire service reports.



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