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Four years after the fall of Saddam Hussein, the story of Iraqi petroleum remains one of great promises unfulfilled. Iraqi oil did not pay for the first round of postwar national reconstruction, as Bush administration officials had predicted. Nor has the industry come close to matching its decades-old pumping record of 3.7 billion barrels a day – a level at which Iraq might become a vital source of oil for thirsty world markets.
"I think they are years away from being a reliable 4-million-barrel-a-day producer," says Frank Verrastro, director and senior fellow in the energy program of the Center for Strategic and International Studies (CSIS).
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According to oil ministry experts, overall "the Iraqi oil infrastructure is in desperate need of upgrades and improvements," says the SIGIR assessment.
That need can be seen in the nation's production levels. In the first quarter of 2007 Iraqi crude oil production averaged 1.95 million barrels per day, according to the US Special Inspector General. That's far short of the Iraqi goal of some 2.5 million BPD.
In fact, Iraq has missed oil production targets every quarter since 2004.
Unsurprisingly, the nation's continued violence is a big reason for this shortfall. Since the US invasion there have been some 400 insurgent or terrorist attacks against pipelines, pumping stations, oil fields, and other parts of Iraq's oil infrastructure, according to the Brookings Institution, a Washington think tank.
But security isn't the only problem. Mismanagement of oil reservoirs, inadequate maintenance of pumps and pipes, and shortage of storage facilities at offshore loading terminals in the Gulf has hampered production as well, according to a recent report on Iraq's oil sector by Amy Myers Jaffe, an energy expert at Rice University's James A. Baker III Institute for Public Policy.
Nor has Iraq brought any new oil fields on-line since 2003. "The main reason for this lack of investment has not been lack of funds, but rather the politicization of the oil ministry, the absence and/or exodus of trained personnel, and poor or corrupt management in the oil sector," writes Ms. Jaffe.
Meanwhile, the future of Iraq's draft oil law appears in doubt. Iraqi Kurds and Sunnis have expressed deep misgivings about some legislation details, each group for its own reasons ...
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