Tuesday, September 06, 2005

Iraq Oil Pipeline

NYT reported Saboteurs shut down Iraqi crude oil exports to Turkey for virtually all of the past year, but the oil is flowing again after Iraq's government put in place elaborate new security measures and decided to move its product in what is essentially a clandestine operation. In the new export system, described over the last two weeks by officials in two state-owned oil companies, the Iraqi armed forces and a deputy prime minister, officials secretly open Iraq's northern pipeline to send batches of oil to Turkey and then shut it down again before insurgents can attack.

This seems to be a very good way to deal with the problem.
The government has recruited, trained and equipped thousands of local tribesmen and stationed them at hundreds of new guard posts along the pipeline. But disputes have already broken out within the government over who will pay the hundreds of millions of dollars it will take to continue that arrangement and expand it to cover all vulnerable points. World oil prices, now just under $70 a barrel, have recently displayed strong sensitivity to fluctuating supplies, and Iraq's northern oil fields, centered on the city of Kirkuk, can produce close to a million barrels a day, according to estimates by the state-owned North Oil Company and the United States Energy Department.
That ought to go a long way to paying the hundreds of millions of dollars to provide security to the pipeline

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