The Globe and Mail June 17, 2004
Pipeline blasts cut off Iraq's cash flow
Interim government totally dependent on oil sales for export revenue
By Estanislao Oziewicz
Iraq's leaders face the prospect of assuming power in two weeks without the country's only independent source of revenue after saboteurs staged multiple attacks on vital oil pipelines.
Insurgents hit a major southern pipeline for the second time in two days early yesterday and killed a security chief for one of the country's state-run oil companies, underscoring the impunity with which they operate. Officials said it will take as long as 10 days to repair the pipelines.
"What you are seeing here is effectively a terrorist war against Iraq's critical infrastructure, including the oil infrastructure," coalition spokesman Dan Senor told CNN. "It is an effort to, basically, economically impoverish the Iraqi people."
The attacks are likely to continue after June 30, when the interim government is scheduled to assume formal control of the country, said analyst John Pike of GlobalSecurity.org, which monitors developments in Iraq.
"As long as it remains in their power to do so, they're going to continue to attack critical infrastructure, like pipelines and power stations, and they're going to continue to assassinate any functionary who, from their perspective, is simply collaborating," he said.
If the insurgents can take out the pipelines faster than they can be repaired, "then you've got a problem" well beyond June 30, Mr. Pike warned. "The changeover is a purely formal change."
The interim government is totally dependent on oil exports for revenue, he said. "I can't see anything else the country exports. It's just an overwhelming source of income to the government and income to the country, with which it can pay for imports."
Although economically crippling, the attacks appeared to have little immediate effect on world oil prices, which rose only slightly. But some analysts said more attacks could produce a dramatic rise.
Iraq's exports have been roughly equivalent to the world's current spare capacity for oil, David Thurtell of the Commonwealth Bank of Australia told Reuters News Agency. "There's no fat left," he said. "There's no room for error, accident or more attacks."
Prime Minister Iyad Allawi said last week that attacks on oil pipelines have cost the country $200-million (U.S.), and that was before yesterday's sabotage north of the town of Faw.
The attack crippled two already-damaged pipelines, forcing authorities to stop the flow of crude oil southward to the Basra oil terminal on the Persian Gulf. The two explosions happened in the same area as a blast on Tuesday.
Exports through Basra previously averaged between 1.6 and 1.8 million barrels per day. Exports through northern Iraq had already been halted after a May 25 bombing.
In the northern city of Kirkuk yesterday, Northern Oil Co. security chief Ghazi Talabani was killed in an ambush as he travelled to work.
Three gunmen attacked his car after his bodyguard briefly left the vehicle in a crowded market. The bodyguard was wounded.
Mr. Talabani, the third Iraqi official to be killed since Saturday, was the cousin of the head of Jalal Talabani, head of the Patriotic Union of Kurdistan, which is one of the two main Kurdish parties.
There were other developments yesterday:
The U.S. military said a rocket slammed into a logistics base near the city of Balad, killing two U.S. soldiers and wounding 21 people. Balad is 80 kilometres north of Baghdad. The military statement did not specify whether the injured were U.S. soldiers or included civilians or others on the sprawling compound;
Muqtada al-Sadr, the radical cleric who has led Shia resistance to the U.S. occupation, told his fighters to leave the holy cities of Najaf and Kufa and return home. The order, communicated in leaflets distributed by his office, appeared to be another move to try to gain legitimate political standing in Iraq. He has said he is starting a political party that may participate in elections scheduled for January;
U.S. forces appear to be ramping up their pursuit of Abu Musab al-Zarqawi, according to Associated Press. The Jordanian, considered the most dangerous foreign fighter in Iraq and among the small fraternity of the world's top terrorists, is thought to be moving in and out of Iraq, the news agency reported. U.S. special-operations troops are known to have been moved into the Fallujah area as U.S. aircraft drop leaflets on the city urging residents to turn him in.
© Copyright 2004, Bell Globemedia Publishing Inc.
