Iraq plans to boost oil output despite sabotage threats

Oct 26, 2004 02:00 AM

Iraq, which has the world's second largest oil reserves, is planning to increase output despite the threat of attack on oilfields and pipelines, the country's oil minister said.
"There are threats every now and then against our infrastructure and resources, but we are going ahead with our plans to increase production", Thamir Ghadban told, without giving details about the planned increase. But he added: "Certainly all sabotage would delay that".

With oil prices at record highs, the country is eager to ramp up its production and increase exports to bring in much needed hard currency to rebuild its war-battered economy. But these efforts have been hampered by the lack of security, sabotage and the slow pace of investment in the sector. Some experts have estimated that $ 50 bn is needed over 10 years to rebuild infrastructure.
Ghadban refused to provide further details on the nature of threats but pipelines are often sabotaged. Turkish drivers transporting fuel to Iraq have also been attacked and kidnapped, prompting many of them to stop coming to the country altogether.
"We have been taking more precautions and are prepared to face the threats", he said.

Iraq is now producing 2.5 mm bpd of which 1.8 mm barrels is exported from the Basra terminals in the South and a small amount from the North to the Turkish port of Ceyhan, according to the minister. Ghadban did not provide figures for northern exports, but said "they were irregular and depended on safety issues".
Northern exports only resumed in September after being cut for nearly nine months due to continued sabotage against the pipeline linking the oil fields of Kirkuk in the North to the Mediterranean port of Ceyhan.

Ghadban said insufficient refining capacity and a dramatic increase in the number of vehicles brought into the country after the fall of Saddam Hussein had contributed to the need imported oil products from neighbouring countries.
Some analysts have also blamed the shortages on smuggling.

Source: Monday Morning
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