Iraq Scraps Plan to Boost Oil Productiongreenspun.com : LUSENET : Grassroots Information Coordination Center (GICC) : One Thread
By LEON BARKHO, Associated Press
BAGHDAD, Iraq (September 13, 2000 4:53 p.m. EDT http://www.nandotimes.com) - A shortage of equipment and spare parts has forced Iraq to abandon plans to increase oil production to 3.4 million barrels a day by the year's end, Oil Minister Amer Mohammed Rashid said Wednesday.
Fresh from an OPEC meeting in Vienna, Austria, Rashid also warned the United States that releasing oil from its strategic stockpiles to tame skyrocketing prices will backfire and send the wrong signal to markets.
"Iraq had plans to boost output to about 3.4 million barrels a day by the end of the year. But the non-availability of spare parts and materials prevents us from meeting the target on schedule," he said.
"(America) has built up its stockpiles to be able to meet an emergency or a catastrophe. Drawing from those inventories will give the signal that the situation (in oil markets) is catastrophic, spurring more speculation and higher prices," he said.
U.S. lawmakers have repeatedly urged President Bill Clinton to draw on the reserves as a last resort to tame prices, currently near 10-year highs.
Rashid said he was unhappy with this weekend's agreement by the Organization of the Petroleum Exporting countries to raise output by 800,000 barrels a day effective Oct. 1 in a bid to counter the steep rise in prices.
He said the latest "spikes" in prices were mainly caused by "speculation, heavy taxation (by consumer countries) and political pressure" on OPEC, particularly from the United States.
Iraq, though outside OPEC's production quota structure, advocates a hawkish stand on prices. Its output and exports are conducted under the terms of the so-called oil-for-food program designed to alleviate the impact of the U.N. sanctions on ordinary Iraqis.
Iraq, sitting on the world's second largest oil reserves after those of Saudi Arabia, is now producing a little more than 3 million barrels a day and will try to sustain this level until the end of the year.
Iraq's oil industry has been devastated by wars and U.N. trade sanctions, which had long barred the sale of spare parts to rehabilitate the industry's installations.
A U.N. statement released in Baghdad this week said 2,090 Iraqi contracts for the purchase of materials and equipment to overhaul the oil industry worth more than $1 billion have already been approved. It said only contracts worth $274 remain on hold.
-- Rachel Gibson (firstname.lastname@example.org), September 14, 2000
Thanks so much for this post.
Prior to the rollover, the indications were that Iraq was taking a "fix on failure" approach when it came to Y2K and embedded systems remediation. It is therefore not at all surprising that there have been mentions in the media since the first of the year regarding the need for equipment and spare parts. I hope that those with more detailed information will post here, anonymously if need be, and share what you know about these matters.
-- Paula Gordon (email@example.com), September 14, 2000.
Iraq claims that Kuwait is stealing its
oil again. The event that precipitated
the invasion a decade ago was when Kuwait
used drilling equipment that could drill
at a 450 angle to drill under the border
to get the oil from Iraq's Rumallah oil
field. Bush Sr. is involved in the company
that sold this drilling equipment to Kuwait.
-- spider (firstname.lastname@example.org), September 14, 2000.