Accessibility links

Analysts: Iraqi Oil Economy Depends on Secure Pipelines - 2004-09-10

Continuing attacks on oil-production facilities and pipelines in Iraq remain a threat to that nation's reconstruction effort. Since the U.S.-led invasion that toppled the government of Saddam Hussein more than a year ago, there have been more than 150 attacks on Iraq's pipelines alone. Security analysts see protection of the oil infrastructure as a key part of rebuilding the country.

The security situation overall in Iraq is a vexing problem for those who are trying to rebuild the nation's infrastructure and economy. Contractors working there say they are months behind in many areas because of attacks and the threat of attacks on both work sites and personnel.

Coalition and Iraqi forces have many places to protect, but probably no one sector is as important as the Iraqi petroleum industry. For the moment, oil is Iraq's most important source of funds to rebuild and revitalize the economy. For that reason, Gal Luft, executive director of the Institute for the Analysis of Global Security, believes oil facilities and pipelines need to be a top priority for security forces. "You need money to rebuild Iraq and the best way to stop the pipeline attacks is to convince the Iraqi people that it is in their best interest to fight these sabotage attacks and fight the people who conduct the attacks," he said.

One way of doing that, Mr. Luft says, is to enlist more help from people who live in rural areas around the pipelines. "They can be induced or they can be given incentives to provide security by helping to patrol the area or deter invaders or insurgents from blowing up the pipelines," he said.

Mr. Luft says Iraq's interim government and coalition forces are putting such recommendations from security experts into effect, but that the task before them is daunting. Iraq has around six thousand kilometers of oil pipelines, much of which pass through remote desert areas where providing security is a big challenge. Previous attacks and threats to Iraq's oil delivery system have caused export cutoffs that cost the country between $30 and $50 million a day in lost revenue.

Gal Luft says the insurgents know how vital the oil infrastructure is and see their attacks as a way of undermining coalition efforts to establish a prosperous, democratic country.

"We will have to see if both the Iraqi government and the coalition forces succeed in reducing this problem or, otherwise, there will be very little money for Iraq to finance its reconstruction and then the American taxpayer will have to foot the bill," he said.

There is no question that Iraq has the resources necessary for rebuilding. Iraq is second only to Saudi Arabia in terms of proven reserves of oil, with more than 113 billion barrels. When the pipelines are fully functional, Iraq exports oil through its southern port of Basra at the rate of 1.7 million barrels a day.