|
Books on Iraq
REPUBLICAN REFERENCE
Area (sq.km)
437,072
Population
24,001,816 (July 2002 est.)
Capital
Baghdad
Currency
Iraqi dinar (IQD)
President
|
Update No: 040 - (25/08/06)
Oil industry: optimism of the will
After a lull in September, sabotage in the oil industry was back with a
vengeance in August, disrupting the production of fuel so severely that long
queues formed at every petrol station of the country. The shortage occurs
despite a twelvefold increase in the price of fuel, which has brought the price
more in line with regional prices and consequently reduced smuggling. Until a
few months ago, about 10% of refined fuel and 30% of imported fuel were smuggled
away. The inability to repair pipelines compounds the problem. The new pipeline
carrying oil from the Kirkuk fields to Bajii refinery is reported to leaky and
unable to carry more then 500,000 bpd rather then 800,000 as planned. Only 38%
of planned reconstruction projects related to the oil industry have been
completed.
Nonetheless, the new Oil Minister remains optimistic about the medium term
prospects and keep revising upwards the expected oil production levels. His
latest forecast is 2.9-3 million bpd by the end of the year. In August
production averaged 2.23 million bpd, with peaks of 2.5 million. Apart from
increasing fuel prices, the Oil Ministry has also enacted a number of other
measures to curb smuggling, such as suspending sales to companies blacklisted as
smugglers. The struggle against corruption at the Ministry appears less
successful, although contracts for purchasing fuel from abroad have been made
more transparent. At the beginning of August, Shahristani announced that by
October negotiations with international oil companies will start in order to
develop Iraq's oil industry. The Kurdish regional government, on the other hand,
is upping the stakes in its confrontation with the Ministry and has prepared a
regional law which allows it to claim control over oil resources. The Kurds are
also preparing a similar draft law to be presented to the national parliament,
in a move which will inevitably stir controversy.
Not in a good mood
Together with an ongoing civil war, inflation running at 50% and
unemployment now estimated to run at 50% of the workforce (up from last year's
30% estimate), the fuel shortages contribute to shape a mood of impending
collapse among the population. Although official estimates of GDP growth this
year stand at 4%, few Iraqis seem to benefit at all. With the end of the massive
US reconstruction effort at the end of the summer, unemployment is likely to
rise further. Moreover, little has been achieved in terms of creating the
preconditions for economic recovery. It is now estimated the rebuilding the oil
industry and the electrical grid will cost US$50 billion.
Iran's brinkmanship: not just Lebanon
There are indications that Iran, in line with its policy of controlled
brinkmanship, has been resisting any drift towards a settlement between Sunni
and Shiite groups in Iraq, presumably in order to make Iraq uncontrollable by
the US. The Iranian leadership probably perceives the growing weakness of the
Bush Administration and had decided that it is time to start forcing the US
military out of Iraq. The Iraqi government re-launched its reconciliation
efforts in August, but it is obvious that there are disagreements within it with
regard to whom should be allowed to take part in them. Prime Minister Al Maliki
is inclined to exclude resistance fighters, while Parliament speaker al-Mashadani,
a Sunni, is in favour of including them.
The continuing slide towards civil war is causing its first victim among the
cabinet members, with reports that the replacement of Interior Minister Al-Bolani
is imminent. He is accused of having been unable to control the violence and has
been in charge for just two months. The move might be an attempt by SCIRI to
regain control of the Ministry, which is essential to its strategy of
incorporating its party militias into the police. The growing inter-Shiite rift
is also evidenced by the resignation of three ministers (Transport, Tourism and
Provinces) between the end of June and the end of July, all supporters of
Muqtada As-sadr. As-sadr is likely positioning himself to capitalise on the
unpopularity of the government, within which his influence was in any case weak
and limited to junior ministerial portfolios. He has of course been a consistent
opponent of the US presence in Iraq and it is not improbable that he, more than
other Shiite groupings is closer to Iran who arm and perhaps finance his
faction. We have long considered that he sees himself as the future leader of
this nation and that all his actions are about leading to that destination. A
Muqtada government with its violent religious make-up might tend to make Saddam
Hussein look like a liberal!
«
Top
|
