Oil Disruptions in Kirkuk
Excellent article from WSJ examining oil disruptions in Kirkuk. Lots of connections for John Robb.
The holes help explain why, four years after the U.S. invasion, Iraq hasn’t been able to match its prewar crude production levels of 2.5 million barrels a day. This year, Iraq is averaging 1.9 million barrels, mostly from southern oil fields that haven’t suffered the unrelenting sabotage seen in the North. Kirkuk currently produces 180,000 barrels of oil a day, but under normal conditions it could produce an additional 400,000 barrels a day. At current market prices, that would bring Iraq up to $20 million of revenue a day. Projected over an entire year, this additional income would amount to about one-fifth of Iraq’s current annual budget of $32 billion.
An interesting angle here is that current smugglers may be building upon smuggling networks built by Saddam:
International smuggling of crude was perfected under Mr. Hussein, who sought to bypass export quotas imposed under the United Nations’ oil-for-food program by orchestrating illicit exports to Turkey, Jordan, Syria and across the Persian Gulf. U.S. officials believe that modern-day smugglers may be taking advantage of the old networks.
One sobering fact that particularly struck me: one stretch of the main pipeline used to export oil from northern Iraq only pumped oil for 43 days of the last six months of 2006.
Also, in the first five months of 2007, one pipeline has been broken into 39 times.
Has anyone seen an analysis of how much potential oil production has been lost due to Venezuela’s underinvestment, MEND’s attacks in Nigeria and these disruptions in Iraq? I’d guess that these three regions alone would account for several million barrels per day.
