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Iraq: Saboteurs Target Oil Infrastructure To Undermine Reconstruction Plans

A spate of pipeline explosions over the past weeks have given rise to fears that Saddam Hussein loyalists are targeting Iraq's oil infrastructure in an effort to undermine U.S.-led efforts to reconstruct the country. RFE/RL looks at the recent attacks and how they affect plans to resume large-scale Iraqi oil exports later this month.

Prague, 7 July 2003 (RFE/RL) -- Resistance to the U.S.-led authority in Iraq is falling into a clear pattern some three months after the capture of Baghdad and the toppling of Saddam Hussein's regime.

Most frequently, it takes the form of attacks upon U.S. soldiers patrolling Baghdad and areas to the north where concentrations of Ba'ath Party loyalists remain. In the latest of what have become almost daily ambushes of U.S. troops, two soldiers were killed late yesterday and early today in separate attacks on their convoys in the capital. Such attacks have killed almost 30 U.S. soldiers since Washington declared on 1 May that major combat was over.

Less frequent, but equally persistent, are attacks by saboteurs on Iraq's energy infrastructure. In past weeks suspected members of the former regime or other anticoalition groups have hit pipelines to disrupt the operation of power plants in Baghdad and to delay the renewed export of Iraqi crude oil.

Repeated attacks on pipelines carrying crude oil from Iraq's northern oil fields to the main Al-Daura refinery in Baghdad caused panic buying of gasoline by motorists in the capital last month. Those attacks, which reduced the refinery to operating at 45 percent capacity, were accompanied by the spreading of anti-American rumors. One rumor was that the U.S.-led Coalition Provisional Authority (CPA) was restricting gasoline supplies to punish ordinary Iraqis for resisting them.

Similarly, saboteurs two weeks ago damaged the main pipeline carrying crude oil for export to the Baiji refinery complex, Iraq's largest, some 200 kilometers north of Baghdad. There, output is already running at only 70 percent capacity due to the pillaging of power lines which occasionally forces the complex to temporarily shut down.

Oil experts say a combination of sabotage attacks and looting has already forced Iraq's Oil Ministry to postpone its original plans to begin large-scale exports of crude five weeks ago. Acting Oil Minister Thamer Ghadhban moved that target date to the middle of this month, but it remains uncertain whether he will find his new deadline any easier to meet.

Walid Khadduri, an oil expert and editor in chief of the Cyprus-based "Middle East Economic Survey," said the widespread looting that took place following the Iraq war "stripped a lot of the fields and refineries and oil installations of equipment and spare parts and material, and this created a big hole in the operations and created the first [production] delay and the first shortfall."

He said another problem with resuming Iraq's oil exports is the half-dozen pipeline bombings over the last three weeks. "It is possible to fix pipelines in 48 hours, but it disrupts the normal flow of oil and creates havoc in the normalcy of contracts done with customers, because customers expect a steady flow of oil," Khadduri said.

Khadduri said production in Iraq now stands at about 900,000 barrels per day (bpd). That is just 60 percent of the Iraqi Oil Ministry's production target of 1.5 million barrels per day by the middle of this month -- a quantity that would mark the return of Iraq as a significant oil exporter. Prior to the war, Iraq's production was some 2.5 million bpd.

As Iraq's Oil Ministry struggles to build production, it has yet to win the confidence of global oil buyers. Analysts say oil companies remain hesitant to sign contracts to buy Iraqi oil on a steady basis -- the mainstay of the oil industry business -- until a steady flow of oil is assured. For now, the Oil Ministry has been forced to put Iraqi oil up for bid only after the oil has actually been produced and put in storage tanks, rather than taking bids for future production.

Iraq's oil infrastructure is an attractive target for saboteurs because it directly undercuts the funding for reconstruction efforts. Iraq's U.S.-led administration is counting on using the country's oil revenues as the main source of money for reviving the country's economy after more than a decade of UN sanctions.

The saboteurs may also hope that disrupting the oil supply puts political pressure on Washington and London by helping keep world oil prices high. That could make attacks on the pipelines a lever for possibly winning some concessions from the allies if the attacks are pressed hard enough.

Oil expert Khaddouri says the slow return of Iraqi oil to the world market, among a number of other factors, has helped to keep prices up since the war. The other factors contributing to the upward pressure include a spike in the price of natural gas in the United States, which is causing U.S. power companies to temporarily switch to fuel oil, and labor problems slowing oil production in Nigeria and Venezuela.

In recent weeks, some evidence has emerged that the sabotage attacks may be part of a plan prepared by Hussein's regime to wage a guerrilla war if it were to be defeated. "The New York Times" reported late last month that allied officials found an "emergency plan" in Basra dated 23 January, which outlined steps including sabotaging power plants and cutting communication lines to undercut any occupying force. The document was marked for distribution to intelligence officers throughout the country.

In reaction to the sabotage, the Iraq Oil Ministry recently proposed doubling the number of guards it employs. Iraq's three state-owned oil companies are reported to currently have a total of some 5,000 security men, but there are more than 4,500 miles of pipelines crisscrossing Iraq's desert. U.S. and British forces are said to be stretched too thin to undertake intensive patrolling of the oil infrastructure in addition to their current security duties.

Also in response to the growing sabotage problem, CPA head Paul Bremer recently announced plans to form a new all-Iraqi security force to protect key utility and oil installations. The size of the new force, which is to be made up of former soldiers, has not yet been announced. The CPA, which also plans to create a new Iraqi army, disbanded the former national army of some 400,000 men two months ago to purge it of Ba'athist loyalists.