Iraqi oil industry staggers as government forms

By Terry Friel

BAGHDAD (Reuters) – Iraqi insurgents have crippled the
vital oil industry, but the government has ignored pleas for
help to fight graft and smuggling, a senior official said on
Tuesday.

Tackling the endemic violence and reviving the oil sector
to sustain the fledgling democracy are the two biggest
challenges facing Prime Minister-designate Jawad al-Maliki as
he sets about forming a government of national unity.

But Oil Ministry inspector-general Ali al-Alaak told
Reuters the violence wracking the country, corruption and
smuggling were costing the country billions of dollars a year.

With a 30-day deadline for parliamentary approval of his
post and a yet-to-be chosen cabinet ticking since Saturday,
Maliki, a tough politician from the majority Shi’ite Muslim
community, said he hoped to deliver early.

“If God is willing, I am setting myself a timetable of 15
days to finish forming the cabinet and deliver it to the
parliament,” he told Iraqiya television late on Monday.

BOMB, JUDGE KILLED

President Jalal Talabani asked Maliki to form a government
of national unity embracing Shi’ites, Sunni Arabs and Kurds to
end an insurgency and sectarian violence threatening to drag
the country into civil war.

As politicians haggled over a government and key posts for
months after parliamentary election in December, the interim
government was unable to tackle the security problem.

Baghdad has been hit by a string of bombings this week, the
latest on Tuesday in a minibus near a crowded market, killing
two people. Gunmen also killed a senior judge in the capital.

Sectarian violence has rocketed after the February bombing
of a major Shi’ite shrine.

U.S. ambassador to Iraq Zalmay Khalilzad, who spearheaded
Washington’s very public efforts to push politicians into
agreement, warned Americans to prepare for a long engagement in
Iraq and the Middle East.

“We must perhaps reluctantly accept that we have to help
this region become a normal region, the way we helped Europe
and Asia in another era,” he told the Los Angeles Times. “Now
it’s this area from Pakistan to Morocco that we should focus
on.

For Maliki and Iraq, the economy is a critical challenge.

After releasing a grim report on the oil industry, the
lifeline of Iraq’s war-shattered economy, the Oil Ministry’s
inspector Alaak said rebel attacks were worsening.

“It has been going on for two or three years now without
stopping. Actually it has increased. They have always succeeded
in attacking very sensitive sites,” Alaak said.

“Every time we fix the problems because of those attacks,
the next day or a few days later they can attack the same
site.”

And the industry is wracked by graft and government
neglect.

“We have taken these problems to the highest authorities
and nothing was done. Perhaps they were busy with other
problems,” he said. “I have sent them reports three or four
times. There have been no changes.”

Oil has hit record highs this year — a barrel of crude is
currently more than $70 — due to concerns Iran’s dispute with
the West could cut exports from the world’s fourth largest
producer and due to supply losses from Iraq and Nigeria.