Failure to rebuild is faulted in weak Iraqi oil production

WORLD DIGEST

World Digest

September 27, 2005|By Los Angeles Times

QARMAT ALI, Iraq -- The failure to rebuild key components of Iraq's petroleum industry has impeded oil production and might have permanently damaged the largest of the country's vast oil fields, U.S. and Iraqi experts say.

The deficiencies have deprived Iraq of possibly hundreds of millions of dollars needed for national rebuilding and kept millions of barrels of oil off the world market at a time of growing demand.

Engineering mistakes, poor leadership and shifting priorities have delayed or led to the cancellation of several projects critical to restoring Iraq's oil industry, according to interviews with more than two dozen current and former U.S. and Iraqi officials and industry experts.

The troubles have been compounded in some cases by security issues, poor maintenance and disputes between the United States and its main contractor, Houston-based KBR, a subsidiary of Halliburton Corp., according to the interviews and documents.

Despite U.S. spending of more than $1.3 billion, oil production remains below prewar levels of 2.5 million barrels a day and well below a December 2004 goal of up to 3 million barrels a day.

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