- The Washington Times - Monday, May 12, 2003

BAGHDAD (AP) — Iraqi oil specialists, reassessing damage to their industry from postwar looting, have scaled back production projections by one-third and expect to produce only 1 million barrels a day in June, the acting oil minister said yesterday.

In one sign of the energy shortfall in this oil-rich nation, Baghdad expects within two weeks to begin importing gasoline from neighboring Kuwait to help motorists who now line up for hours to buy scant supplies at city gas stations.

“There will be a clear improvement,” said acting Oil Minister Thamir Ghadban.

As if to underscore the depth of the energy crisis, the news conference at which Mr. Ghadban and Iraq’s acting electricity chief spoke had to be moved to a sunlit hallway when city power failed and lights went out in an Oil Ministry conference room.

Kareem Hasan, interim head of the national Electricity Commission, said the capital was receiving only 40 percent of its usual electricity needed, but hoped that full power would be restored within two months, when repairs were expected to be completed to transmission lines extensively damaged by U.S. bombs and vandals.

Mr. Ghadban and Mr. Hasan, named to their interim posts by U.S. occupation authorities, met to coordinate the supply of oil to Iraqi power installations.

Before the U.S.-British invasion shut down the industry in March, Iraq was producing about 3 million barrels a day of crude oil, of which at least 2.1 million barrels was exported. Heavy postwar looting of oilfield and other industrial equipment has slowed the industry’s resumption of full production.

Iraqi oil specialists had predicted the industry might rebound to half its prewar production in June, but Mr. Ghadban said that won’t happen.

“We were more optimistic, but after meeting with senior people from the various upstream companies, we are now more realistic,” he said. “We shall meet that target” — 1.5 million barrels a day — “at a later date.”

Mr. Ghadban attributed the more-pessimistic outlook to damage to equipment and to limited supplies of industrial water, needed in huge quantities for oilfield operations. Power shortages have reduced water-pumping capacity in many places.

Iraq’s proven crude-oil reserves, 112 billion barrels, are second only to Saudi Arabia’s. Oil had accounted for 95 percent of Iraqi revenues in recent years.

Since the mid-1990s, under international economic sanctions, Iraq has been able to export oil only under close U.N. supervision, using the proceeds mostly to buy food and other humanitarian goods.

The United States and Britain are seeking a lifting of the U.N. sanctions and restoration of open trade in Iraqi oil.

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