For Iraq's oil wealth, tangled pipes
As US works to restore Iraqi oil production and sales, Russia, France and even the UN hold critical leverage.
As the dust settles on the fighting in Iraq, a formidable battle is shaping up for control of the country's vast mineral wealth, pitting the coalition powers on one side against France and Russia on the other, with the Iraqis themselves caught in the middle.Skip to next paragraph
Subscribe Today to the Monitor
At stake is Iraq's immense oil potential. Its proven reserves are second only in size to Saudi Arabia's, and pipelines, moreover, run north through Turkey as well as south through the Gulf - a crucial point of diversification.
Conventional prewar wisdom predicted that the victorious US forces would quickly turn Iraq into one super-giant oil well that could feed its voracious energy-importing needs.
But the reality is proving somewhat more complex, and it is becoming clear that the US administration will have to involve the international community, not to mention the Iraqis themselves, in rehabilitating Iraqi oil.
"The US administration doesn't have the legitimacy to begin exporting oil," says Rusa Hubari, a Middle East expert with the Energy Intelligence Group. "No one will buy oil at the moment because they ask: Under what law is it functioning?
"If you are loading oil at [the Turkish port of] Ceyhan and your shipment gets lost, who do you sue and under what law?" she asks. "It will have to go through the UN. There will have to be a debate."
The first salvos of oil battle thundered out last week when President Bush called for UN sanctions against Iraq to be dropped. The request sounds innocuous enough, but it masks an urgent US desire for a free hand to start pumping Iraqi crude once again to raise funds for rebuilding the country.
Russia immediately balked at the idea. The concern in Moscow and Paris - both with considerable pre-war oil interests in Iraq - is that they will be shut out altogether if the United States revives the Iraqi oil industry on its own, arrogating impregnable influence for itself in the process. Saudi Arabia's foreign minister also objected to the move, saying sanctions should end only when a legitimate Iraqi government is in place.
The importance of Iraqi oil has been obvious from the way the war was waged. Some have accused the US-led coalition of doing more to protect oil fields than to protect local people. The most closely guarded building in Baghdad is not a bank or a museum, but the Oil Ministry.
Diverse problems face those who would export Iraq's oil. The first problem is a physical one. Few wells were set on fire during the war, but infrastructure has been looted, and stations and transit pipes will need to be vetted for damage, particularly in the large southern oil fields. This will take weeks, officials say.
In the northern city of Kirkuk, trucks - sometimes even official firetrucks - have arrived at the oil fields under the guise of obtaining water nearby, but then pilfer the oil, a scheme the military is trying to stop, say military officials.
Since Kirkuk is a major site for Iraqi oil production, repairs are a priority. The city's electrical and gas facilities came to a standstill when it fell, but the Patriotic Union of Kurdistan says they have since been turned back on.
Restoring Iraq's oil production will require much Iraqi cooperation, say experts. "This industry has been running on a shoestring budget for years, and if there is are people that know how to do it it's the Iraqis themselves," says Martin Purvis, an energy expert with international consultancy Wood Mackenzie.
"Essentially if you send contractors, you are going to come up against issues they have not seen before, like a lot of technology missing, databases, flow models, computers, that sort of thing," he adds.
Secondly, the system of exports is blocked by the power vacuum in Baghdad. Millions of barrels of Iraqi oil are sitting in terminals in Turkey waiting to be sold, but no buyers will emerge until an internationally recognized Iraqi entity can legally sell the product.