[ Pobierz całość w formacie PDF ]
OBSTACLES TO INCREASING PRODUCTION
A massive expansion of infrastructure and investment, as well as
a stable political environment, will be required for Iraq to increase
its oil-production capacity to the oft-quoted 6 million bpd mark.
Initial investment requirements will have to compete with
costs for Herculean humanitarian and reconstruction needs that
have to be met in order to avoid a major health and economic cri-
sis in Iraq after a war. This trade-off will limit how much money
Iraq will have to invest in restoring and expanding its oil indus-
try. If no facilities were damaged, Iraq s total oil revenues would
still only likely average around $10 billion to $12 billion annual-
ly.Total oil revenues would be less than half of this amount if only
northern oil production and export facilities were secured with-
out damage.
Iraq s Infrastructure Problems Are Severe. Due to operating con-
straints and the regime s erratic policies, Iraqi oil managers have
resorted to sub-optimal techniques to sustain production. It will
be impossible to gauge the extent of Iraq s oil-sector damage
[22]
74038Textpages 1/23/03 8:02 AM Page 23
Addendum
before completing overall assessments. Therefore the United
States must support international and Iraqi efforts to devise a com-
prehensive plan for the redevelopment of Iraq s entire oil indus-
try that determines the following:
" the optimum development of oil fields with regard to maxi-
mizing access to export facilities and processing plants;
" the optimum manner to develop and expand transportation
infrastructure inside Iraq and for export;
" the optimum manner to develop infrastructure for the impor-
tation of needed oil field equipment and other supplies with
regard to ports, roads, and railways; and
" the allocation of investment to these communication routes
as well as the power generation needed to implement capac-
ity expansion.
Repair of Export Facilities Will Likely Be the Determining
Factor in the Restoration and Expansion of Iraqi Oil Production
Capacity. Current export capacity via Turkey is limited to 900,000
bpd. Repair of two pumping stations and the Zakho metering sta-
tion must be completed in order to increase Iraq s exports through
Turkey to their pre-1990 capacity of 1.7 million bpd via the two
parallel pipelines to Ceyhan.
Exports from southern oil fields will depend on the condition
and capacity of Iraq s north-south pipeline and repair of its
Persian Gulf export terminals. The smaller Mina al-Bakr termi-
nal currently can handle 1.3 to 1.4 million bpd. Additional repairs
will be needed to restore its operations to nameplate capacity of
1.6 million bpd.
Full repair of the Turkish parallel lines and Mina al-Bakr
would bring Iraq s export capacity to 2.8 million bpd. Iraq s other
Persian Gulf port of Khor al-Amaya could add an additional 1.2
million bpd of export potential if repaired and utilized.
Other export outlets include Syria, where a 1.4 million bpd pipeline
connection currently exists. Syria uses most of the line s capacity
for its own oil exports, but no fewer than 180,000 bpd of Iraqi oil
have been smuggled through Syria in recent years. A small pipeline
[23]
74038Textpages 1/23/03 8:02 AM Page 24
Guiding Principles for U.S. Post-Conflict Policy in Iraq
connection also exists to Iran. Saudi Arabia nationalized the 1.65
million bpd IPSA-2 oil pipeline that can carry oil from Iraq to Saudi
Arabia s Red Sea coast, claiming the facility as war reparations.The
integrity of this pipeline has been maintained, and it is considered
operational.
Massive repairs are also needed to Iraq s ten oil refineries.
WHO SHOULD MANAGE IRAQ S OIL?
Iraq has a large, well-trained professional corps of oil-industry tech-
nocrats and technicians that is capable of controlling the oil
industry, as it has for three decades. Failure to tap this national resource
to repair, run, and expand Iraq s oil industry would result in a seri-
ous political, security, and public relations backlash.
During conflict and in its aftermath (if damage is not severe),
Iraqi professionals will be able to undertake normal Iraqi oil
operations with continued oversight by the United Nations. The
continuation of the UN s oil-for-food program structure will
assist in building a resource distribution mechanism with mini-
mal corruption and transparent prioritization in the allocation of
oil revenues.
Due to massive infrastructure requirements, however, Iraq s oil
experts may be amenable to establishing an international consortium,
with Iraqi participation and leadership, to assist with planning, coor-
dination, and implementation of a wide variety of projects. Para- [ Pobierz całość w formacie PDF ]
zanotowane.pl doc.pisz.pl pdf.pisz.pl wyciskamy.pev.pl
OBSTACLES TO INCREASING PRODUCTION
A massive expansion of infrastructure and investment, as well as
a stable political environment, will be required for Iraq to increase
its oil-production capacity to the oft-quoted 6 million bpd mark.
Initial investment requirements will have to compete with
costs for Herculean humanitarian and reconstruction needs that
have to be met in order to avoid a major health and economic cri-
sis in Iraq after a war. This trade-off will limit how much money
Iraq will have to invest in restoring and expanding its oil indus-
try. If no facilities were damaged, Iraq s total oil revenues would
still only likely average around $10 billion to $12 billion annual-
ly.Total oil revenues would be less than half of this amount if only
northern oil production and export facilities were secured with-
out damage.
Iraq s Infrastructure Problems Are Severe. Due to operating con-
straints and the regime s erratic policies, Iraqi oil managers have
resorted to sub-optimal techniques to sustain production. It will
be impossible to gauge the extent of Iraq s oil-sector damage
[22]
74038Textpages 1/23/03 8:02 AM Page 23
Addendum
before completing overall assessments. Therefore the United
States must support international and Iraqi efforts to devise a com-
prehensive plan for the redevelopment of Iraq s entire oil indus-
try that determines the following:
" the optimum development of oil fields with regard to maxi-
mizing access to export facilities and processing plants;
" the optimum manner to develop and expand transportation
infrastructure inside Iraq and for export;
" the optimum manner to develop infrastructure for the impor-
tation of needed oil field equipment and other supplies with
regard to ports, roads, and railways; and
" the allocation of investment to these communication routes
as well as the power generation needed to implement capac-
ity expansion.
Repair of Export Facilities Will Likely Be the Determining
Factor in the Restoration and Expansion of Iraqi Oil Production
Capacity. Current export capacity via Turkey is limited to 900,000
bpd. Repair of two pumping stations and the Zakho metering sta-
tion must be completed in order to increase Iraq s exports through
Turkey to their pre-1990 capacity of 1.7 million bpd via the two
parallel pipelines to Ceyhan.
Exports from southern oil fields will depend on the condition
and capacity of Iraq s north-south pipeline and repair of its
Persian Gulf export terminals. The smaller Mina al-Bakr termi-
nal currently can handle 1.3 to 1.4 million bpd. Additional repairs
will be needed to restore its operations to nameplate capacity of
1.6 million bpd.
Full repair of the Turkish parallel lines and Mina al-Bakr
would bring Iraq s export capacity to 2.8 million bpd. Iraq s other
Persian Gulf port of Khor al-Amaya could add an additional 1.2
million bpd of export potential if repaired and utilized.
Other export outlets include Syria, where a 1.4 million bpd pipeline
connection currently exists. Syria uses most of the line s capacity
for its own oil exports, but no fewer than 180,000 bpd of Iraqi oil
have been smuggled through Syria in recent years. A small pipeline
[23]
74038Textpages 1/23/03 8:02 AM Page 24
Guiding Principles for U.S. Post-Conflict Policy in Iraq
connection also exists to Iran. Saudi Arabia nationalized the 1.65
million bpd IPSA-2 oil pipeline that can carry oil from Iraq to Saudi
Arabia s Red Sea coast, claiming the facility as war reparations.The
integrity of this pipeline has been maintained, and it is considered
operational.
Massive repairs are also needed to Iraq s ten oil refineries.
WHO SHOULD MANAGE IRAQ S OIL?
Iraq has a large, well-trained professional corps of oil-industry tech-
nocrats and technicians that is capable of controlling the oil
industry, as it has for three decades. Failure to tap this national resource
to repair, run, and expand Iraq s oil industry would result in a seri-
ous political, security, and public relations backlash.
During conflict and in its aftermath (if damage is not severe),
Iraqi professionals will be able to undertake normal Iraqi oil
operations with continued oversight by the United Nations. The
continuation of the UN s oil-for-food program structure will
assist in building a resource distribution mechanism with mini-
mal corruption and transparent prioritization in the allocation of
oil revenues.
Due to massive infrastructure requirements, however, Iraq s oil
experts may be amenable to establishing an international consortium,
with Iraqi participation and leadership, to assist with planning, coor-
dination, and implementation of a wide variety of projects. Para- [ Pobierz całość w formacie PDF ]