- The Washington Times - Thursday, October 23, 2003

ASSOCIATED PRESS

Oil production in Iraq has the potential to hit 5 million to 6 million barrels per day in the next three to four years, triple the current output, Commerce Secretary Donald L. Evans said yesterday in an interview with the Associated Press.

The estimate was more optimistic than those by Iraqi oil officials.

Mr. Evans, just back from a visit to Iraq, said he was impressed with the free-market spirit he saw and the number of foreign companies eager to set up operations even in the face of continuing security risks.

“I went to Iraq expecting to find a frightening environment, a feeling of desperation. I found anything but that,” Mr. Evans said.

The visit to Baghdad, where he presided over the introduction of the country’s new currency, was part of an administration campaign to counteract increased criticism of President Bush’s Iraq policy.

As evidence of Iraq’s potential, Mr. Evans cited the country’s oil reserves, second-largest in the world behind Saudi Arabia’s.

“Are there vast resources that would cause somebody to think that over the next three to four years they could get oil production up to 5 to 6 million barrels a day? I think that is realistic to think in those terms,” Mr. Evans said.

Iraq’s oil ministry has a long-term target of producing 6 million barrels daily by 2014. The ministry’s chief executive, Thamir al-Ghadban, told potential foreign investors this week that he hopes a strong recovery will allow the country to reach that target much sooner.

A study produced by a U.S. working group for the Pentagon earlier this year said it could take up to three years to return Iraq’s production to its pre-1990 level of 3.5 million barrels per day, and that this could happen only after billions of dollars in repairs.

That estimate ran counter to optimistic administration forecasts that much of Iraq’s reconstruction could be financed by oil sales.

While Mr. Evans said Iraq produced 2 million barrels of oil one day during his trip, Mr. al-Ghadban said the goal for October was 1.5 million barrels daily, and that that would be difficult to meet.

As further evidence of improving conditions in Iraq, Mr. Evans pointed to more than 300 foreign companies attending private-sector sessions of a donors conference this week in Madrid.

He said this high level of interest, including American companies ranging from Pepsi-Cola to health care and telecommunication firms, showed business executives view Iraq, despite the security problems, as a good place to invest.

“I can tell you there is a lot of capital from around the world, including right here in the United States … saying I want to locate my plant right there on that piece of land” in Iraq, Mr. Evans said.

In a wide-ranging interview, Mr. Evans also previewed a trip beginning today to China, which will include meetings with Premier Wen Jiabao and other top Chinese officials.

The administration is under increasing political pressure to narrow America’s $103 billion trade deficit with China as a way of halting the loss of 2.7 million U.S. manufacturing jobs over the past three years.

“I will be taking a strong message of fighting for a level playing field for our workers,” Mr. Evans said.

Mr. Bush and Treasury Secretary John W. Snow have tried unsuccessfully to get the Chinese government to let its currency rise in value against the U.S. dollar.

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