The Oil Dimension

Unlikely as it seems, the passing of Saddam’s sons will strongly bear on the oil contest simmering quietly but determinedly to prevent the Americans from getting the Iraqi oil industry up and running.

DEBKA-Net-Weekly‘s military and intelligence sources reveal that this contest is the moving force behind what is emerging as an oil front in the Iraqi guerrilla war against US forces. Winning it and getting enough Iraqi oil to market to bring oil prices down from over 30 dollars per barrel to below 20 would be a crucial factor in the 2004 re-election prospects of George W. Bush. Iraqi oil exports in sufficient quantity would give the Bush administration a hand on the levers of pricing and force the Saudis and Russians to adapt to the lower price level. Its revenues would also help stimulate American economic growth and cover the vast expense of maintaining the US army in Iraq amid a guerrilla war.

Iraq is currently costing the American taxpayer upward of $1 billion per month.

Until now the forces impeding Washington’s oil goals have had the upper hand. They have succeeded in slowing down the increase in oil production and almost totally paralyzing exports.

Since the second half of June, when the US government and administration in Baghdad trumpeted the news that at last Iraqi oil exports were to resume, the flow overseas has gone down to a trickle. Very little was reached overseas markets beyond the quantities stored in terminals in Basra and Ceyhan in Turkey.

Production has likewise failed to rise above 700-750,000 bpd, far short of the 1 million plus bpd target forecast for August 1 by the US Army Engineers Corps, which is upholding maintenance of the oil fields and installations.

The causes of the holdups vary from region to region.


Rumeila beset by oil rustlers


DEBKA-Net-Weekly‘s sources report that the southern field of Rumeila is plagued by looters who make off with pumps, pipe sections and any equipment left lying about on the field. Even more damaging is the theft of huge quantities of crude oil from storage tankers as they await transfer to refineries or tankers. The gangs of looters number thousands of men who load the stolen crude aboard boats of assorted shapes and sizes and smuggle it to makeshift anchorages along the Shatt al Arb from which they are shipped to Arab principalities along the Persian Gulf or Iran. An estimated 5 to 8 percent of the oil produced in southern Iraq is looted in this way.

The American and British fleets in this part of the sea lack the types of craft and resources suitable for fighting this kind of oil piracy. It is no good sending a mammoth aircraft carrier or cruiser against a motor boat smuggling 300 barrels of looted oil. What is needed to fight the traffic is a coast guard unit like the US forces patrolling American shores with intelligence support and backup from helicopters equipped with electronic tracking devices.

No such force is planned.


Baiji Refinery and Iraqi Strategic Line – Semi-operational


Central Iraqi oil installations consist of oil fields, refineries and hundreds of kilometers of pipeline, which constitute the hub of the Iraqi oil industry. The Iraqi Strategic Line runs from Rumeila round Basra and carries oil to Kirkuk or from Kirkuk to Basra. Its western branch reaches Haditha where it links up with the Iraqi-Syrian pipeline, making it theoretically possible to export Iraqi oil to a Mediterranean outlet from the northern and southern fields alike. The trouble is that only sections of this pipeline function; most of its course has long been disabled by sabotage or looting.

While American forces stand guard over the northern and southern oil fields and installations, they are short of manpower to defend the hundreds of kilometers of the Iraqi Strategic Line and the dozens of pumping stations along its route.

Iraqi guerrillas, likewise short of manpower to target the entire route, seek out the undermanned mobile American patrols deployed in the Sunni Muslim Arab lands of central and Western Iraq traversed by the pipeline. In this way they wreak enough damage to cripple the entire network. Oil pumped in the north and south has to be piped out through local lines. It cannot be moved between the two regions because the central pipeline is in permanent disrepair

The guerrillas keep the oil industry tied up in other ways. By targeting the section of pipe linking Baghdad to the Baiji refineries, they not only hold up Iraqi oil exports overseas but also oil supplies from Kirkuk to the capital. The citizens of Baghdad are consequently bedeviled with frequent electricity cuts, a major cause of complaint against the Americans.

The foreign forces intended to police the pipeline network and refineries of central Iraq have not materialized and the Americans do not look like coming up with the extensive security force needed.


Kirkuk – Best Protected in Iraq


The American-Kurdish alliance is the key to Kirkuk’s oil fields being the most efficiently guarded in the country. Local Kurdish tribesmen take party in securing the fields and the pipelines carrying exported oil out to Turkey and its Mediterranean terminal at Ceyhan. Both main Kurdish factions, Jalal Talabani’s PUK and Masoud Barzani’s PDK, field altogether 40,000 men under arms, which would be inadequate were it not for their pre-emptive strategy, which has been kept under wraps so as not to stir up factional and tribal frictions in northern Iraq. DEBKA-Net-Weekly reveals that detachments of Kurdish commandos assist American military efforts to seal the Iraqi-Syrian and Iraq-Iranian frontiers. They conduct sorties against the fringes of the Sunni regions so as to bottle the guerrilla gangs up and discourage them from infiltrating neighboring areas. They also maintain a military presence on the borders of their traditional foe, Turkey.

The Kurdish militias carry out these duties in addition to maintaining law and order in their towns and villages.

At the same time, the Kurdish and American manpower shortage is reflected in the state of security in the oil fields of Kirkuk where large sections of plant are routinely plundered. Weeks go by until replacements are delivered. Some are stolen en route. American oil sources in northern Iraq tell DEBKA-Net-Weekly that in Kirkuk, more than any other Iraqi oil region, the looting does not appear to be criminal so much as planned by experts who know exactly which pieces of equipment and components they need to steal to cripple production and exports for the longest periods.

Concerned officials in Washington and Paul Bremer’s administration in Baghdad are beginning to wonder if the damage keeping the Iraqi oil industry dysfunctional is merely the work of criminal gangs of looters and Saddam loyalists turned guerrillas, or whether an outside force is at work. It goes without saying that Syrian and Iranian hands are involved in the guerrilla campaign. But DEBKA-Net-Weekly‘s intelligence sources have learned of a suspicion under investigation – which no American official source is willing to admit for attribution – that Saudi oil interests may be implicated or even elements connected to the French oil industry. After all, tying Iraqi oil production up in knots cannot be good for America and its president.

Until now, it was generally assumed that Saddam’s sons were pulling the strings of the guerrilla campaign against the oil industry. The sabotage may cease with their passing. Its continuation will mean that other hands are keeping Iraqi oil on the boil.

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