Attacks cease on Iraq's pipeline, oil exports boom

July 04, 2006|Ryan Lenz, Associated Press

BEIJI, Iraq -- For more than two years the attacks came like clockwork. As soon as the military secured and workers repaired the pipelines from Iraq's northern oil fields insurgents would strike.

But roughly three weeks ago they suddenly stopped, letting crude oil flow freely from Iraq's vast reserves near Kirkuk.

Perhaps insurgents feared reprisals in Salahuddin province, where pipelines from Kirkuk flow to the country's largest refinery in Beiji. Terror leader Abu Musab al-Zarqawi's death maybe disrupted a chain of command that ordered the attacks, military officials said.

Whatever the cause, US forces welcome the change, even if history since the US-led invasion in 2003 has shown the free flow of oil in Iraq is only temporary at best.

``I just hope that it lasts long enough where people start realizing ` We're making money. We could be rich like Kuwaitis,' " said Army Lieutenant Colonel Craig Collier, deputy commander of the 3d Brigade, 101st Airborne Division. ``But what is really going on? We don't know."

In the past three weeks, Iraq has exported 6.2 million barrels of crude oil to Turkey from its northern fields. Total exports from Iraq in that period, including the oil fields in the south, have increased to 2.5 million barrels per day, the highest level since the invasion, the Oil Ministry reported.

With a $60 a barrel market price in Turkey, military officials believe exports so far equate to about $372 million since oil began flowing from the north. Oil is the biggest source of income for the Iraqi government, which is struggling to curb violence and restore the supply of electricity and water.

Iraq, a founding member of the Organization of Petroleum Exporting Countries, sits atop the world's third-highest proven reserves. With an estimated 115 billion barrels, exceeded in OPEC only by Saudi Arabia and Iran, the Bush administration predicted three years ago that Iraq would finance its own reconstruction.

But Iraq's oil production slipped after the invasion, stuck below even the reduced levels that prevailed in the 1990s, when the country was under tough UN sanctions.

The 3d Brigade, nicknamed the ``Rakkasans," has studied the intricate web of oil corruption near the refinery in Beiji as part of a renewed effort to restore the oil industry.

Working with other coalition and Iraqi soldiers, they targeted oil smugglers, who they believe are behind many of the attacks on the fuel export lines. The black market truckers buy gasoline or diesel at Iraq's government-subsidized prices and drive to Turkey to sell it for 10 times the amount, so official exports compete and cut into their profits.