Jan. 16, 2006
The article “Oil reconstruction in Iraq: progress and challenges” (OGJ, Dec.

Iraqi oil reconstruction

The article “Oil reconstruction in Iraq: progress and challenges” (OGJ, Dec. 19, 2005, p. 26) was disappointing in what it didn’t say. Firstly, data appearing in the same issue of OGJ as the subject article show that Iraqi crude oil reserves are not the “world’s second largest” but are the fourth highest after Saudi Arabia, Iran, and Canada, noting that Canadian figures include some nonconventional reserves.

Secondly, the authors fail to recognize that Iraqi oil production remains well below the 2003 preinvasion level of 2.6 million b/d and that it actually declined in 2005 to an estimated 1.8 million b/d from 2.0 million b/d in 2004. This decline occurred despite the infusion of over $400 million to date, and there is little optimism, even with the additional massive funding already authorized, that production levels can be increased to prewar levels in the foreseeable future.

Iraqi oil production cannot make a dependable contribution to the country’s economy and recovery as long as insurgent attacks on oil facilities and pipelines continue. The Institute for the Analysis of Global Security reports more than 200 attacks on Iraqi gas or oil pipelines and refineries since June 2003 have cost the government about 200,000 b/d.

Despite the bland assurances of the authors that “the threat of insurgent attacks on the physical equipment and workers is a challenge that is being met through increased security,” there is no evidence that the security measures are proving effective. Moreover, normal ongoing exploration and development drilling operations, essential to the maintenance and expansion of oil production, cannot be conducted in an environment of political unrest and violence. The authors confirm this when they write, “The Iraqi infrastructure will operate as intended only to the degree that the Iraqi security forces are able to overcome the insurgency and reduce the threat to normal operations. It may take several years for the threat to diminish significantly.” The question thus arises, should some portion of the massive US-funded effort to reconstruct Iraq’s oil infrastructure be deferred until security has substantially improved? Restoration and expansion of oil field production is a formidable challenge at best but becomes nearly impossible where security is tenuous and unreliable.

In short, Iraqi crude oil and gas production, so essential to Iraq itself and to the world’s economy, remains hostage to hostile forces within the country, and there are no signs that this hostility is abating. The outlook is not nearly as encouraging as we might wish or as the authors suggest.

Thomas S. Wyman
Palo Alto, Calif.