A rchive Date
[ 04-05-2003 ]
Category
[ International Relations ]
sub-Categoy
[ Iraq ]
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[http://www.chron.com/cs/CDA/ssistory.mpl/business/1894428
Iraq's oil gives U.S. series of challenges
By DAVID IVANOVICH
Copyright 2003 Houston Chronicle
May 3, 2003, 1:21PM
BASRA, Iraq -- Jabar Alabie sits hunched over in his chair, listening listlessly as U.S. and British military engineers discuss the ongoing work to repair Iraq's dilapidated oil infrastructure.
Alabie is today the de facto leader of Iraq's South Oil Co. Military leaders are a bit vague on his background, but they've decided Alabie's their man.
Alabie, however, is openly frustrated with his new, Anglo-American overlords. He has asked military commanders repeatedly for details on who's doing what in a new Iraqi oil ministry.
"I'm still waiting," Alabie says, a look of disgust upon his face.
The U.S.-led occupation forces in Iraq may be in control of the third largest oil reserves in the world, but they're not ready to run a national oil company.
Anticipating massive destruction in Iraq's fields on par with that seen in Kuwait 12 years ago, military leaders, instead, have found a sprawling, largely intact energy sector and thousands of workers clamoring to get back on the job.
But the coalition forces have been caught unprepared.
Iraq's oil fields currently are pumping about 120,000 barrels a day, a far cry from the nearly 2.5 million barrels a day seen before the war. The United States is committed to getting Iraqi production back up to prewar levels. But for now, the focus is on reaching 400,000 barrels a day, believed to be enough to meet Iraq's domestic oil needs. Export revenues will come later.
The efforts are being hampered, however, by continued looting. Looters, for instance, broke into a pumping station in the Rumaila district, stealing not only the 100-horsepower motors inside, but the roof and siding of the building as well. Army Corps officials fear the looting could set their efforts back months.
With the Baath Party leaders being purged, a power vacuum has developed. The Bush administration is still struggling to assemble a management team to operate an oil company with crude production comparable to the likes of Exxon Mobil Corp. or Royal Dutch/Shell Group.
Phil Carroll, the former head of Houston-based Shell Oil Co., is expected to arrive in Iraq within days to take over as head of a new advisory board, which will oversee the activities of an oil ministry to be run by Iraqis.
U.S. officials have approached a number of well-known Iraqi exiles with expertise in the oil industry, only to be turned down by leaders unwilling to be associated with a military occupation.
For instance, Fadhil Chalabi -- Iraq's one-time deputy oil minister and now executive director of London's Centre for Global Energy Studies -- said he could have had a post in the new order. But Chalabi would only be interested if the job offer came from a new government in Baghdad, run by Iraqis.
"I can work, for the time being at the personal level, not taking any official function or post."
Besides the leadership questions, the White House has yet to solve perhaps the greatest issue hanging over a new Iraqi oil industry: the political struggle with France and Russia in the U.N. Security Council over control of Iraq's oil revenues.
Longer term, Iraq's new oil industry will have to deal with more fundamental questions, such as whether to privatize its energy sector and whether to remain in the Organization of the Petroleum Exporting Countries.
In the meantime, workers here at the Basra refinery and in the Rumaila oil fields of southern Iraq, the former employees of a once-proud and highly nationalistic oil company, are growing impatient with what they perceive as American indecisiveness.
Iraq employed more than 22,500 oil workers before the war, including about 13,000 in the south. U.S. Army Corps officials plan to hire them all back, but only about one in four has been called back to work so far, Army Corps officials said.
"People are very anxious about money," Alabie told the military engineers. "We cannot give (them) answers."
Brig. Gen. Robert Crear has promised to provide $20 in emergency funds to anyone who has not received his pay, but U.S. officials had to dash the hopes of many destitute workers, who had heard they were to receive $20 each on top of their salaries.
Other Iraqis, desperate for work, are showing up in the fields as well. A man identifying himself only as Ali arrived at a small drilling office in the North Rumaila field. Smartly dressed, Ali hoped to land a job as a mechanic, only to find scores of current workers being told they would have to wait a few more days for their already-late pay.
"I need work," Ali, the father of 10, said through a translator. "It's very necessary for my family."
Crowds of Iraqi workers, desperate for jobs, are becoming belligerent. American military and contractors are steering clear of groups that just days ago greeted them warmly, and they've had to call in extra troops for security.
Military officials believe that resentment may have been the cause for a drive-by shooting Wednesday, when a gunman in a pickup truck opened fire on a group of oil workers and soldiers, including contractors from Houston-based KBR, formerly known as Kellogg Brown & Root. No one was wounded.
Seemingly mundane issues such as employee badges have become flashpoints.
The U.S. Army Corps of Engineers wanted workers to be issued new identification badges, which the military could better track for security reasons.
Some badges were issued, but then Alabie and other South Oil Co. leaders objected. Some people who shouldn't have gotten badges had been issued one, Alabie said. And many Iraqis complained the whole process smelled of U.S. imperialism.
The Army Corps stopped issuing badges. Rumors then spread that an American badge assured a worker of a job, while the old Iraqi I.D. did not. Suddenly, every one wanted an Army Corps badge. U.S. officials finally persuaded South Oil Co. officials to allow the program to resume.
Unexploded bombs still litter the ground all across southern Iraq.
At a key pipeline facility transporting crude to Basra, demolition experts mark the bombs with orange and green spray paint. The explosives are left in place and later destroyed.
Barefoot children roam the area. The soldiers give the children MREs, the military's ready-to-eat meals, to send them home and get them away from the vicinity.
The crews continue to work as temperatures climb to 105 degrees. Winds whip up sandstorms, which cover the charred Russian tanks and blasted-out foxholes strewn all over southern Iraq.
Swamps of crude still ooze and bubble in the sun, although contractors working for KBR have finished cleaning up a six-mile-long crude oil spill, collateral damage from fighting in the area.
The damage caused by Saddam Hussein-ordered sabotage was far less than had been feared -- only 12 to 13 wells out of 600 surveyed so far were laced with plastics explosives, and only nine were detonated.
Perhaps the greatest damage came during 13 years of economic sanctions and political isolation. After the Persian Gulf War, Iraqi workers were forced to jury-rig oil wells, pipelines and refineries to keep facilities operating.
Here at the Basra refinery, the Iraqis' ingenuity is on display. Despite a lack of spare parts, workers operated the 40-year-old plant at its design limit of 140,000 barrels a day.
British engineers working with the Iraqis expected to bring the facility back up to half its prewar level before pulling out within the next few days. Restoring the plant to full production capacity will be left to the Americans.
On Friday, the lights went out, and the refinery was silent.
 World Fact Book (CIA)]
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