Iraq Petroleum Production Jumps
Iraq is back to producing 1.5 million barrels a day, up from the 800,000 typical of August. With its present equipment, Iraq could produce 3 million barrels a day, and the US administration of the country had been hoping to reach that level by next spring. The low levels of production were caused in part by sabotage of the northern pipeline to Turkey, which required cutbacks or even returning some petroleum to the soil, and in part by looting of equipment in the South. (At present, the north has about 1000 welheads and the south 500, though the northern fields are much more depleted and in future the major production will be in the south). US civil administrator Paul Bremer attempted to ensure the Iraqi people that the US was not usurping the proceeds of Iraqi oil exports. He said 95% of the funds went to Iraqi reconstruction, and 5% to reparations for Kuwait growing out of the 1990-91 Iraqi invasion of that country.
Mahdi al-Hafiz, Minister of Planning in the new Iraqi government, denounced the continued payment of reparations to Kuwait from Iraqi petroleum exports on Sunday, according to al-Hayat. He said rebuilding Iraq would cost at least $100 bn., and that the former regime, not the Iraqi people, invaded Kuwait and contracted enormous loans. He said today’s Iraq should not be burdened with these past obligations incurred by Saddam. It seems to me that Iraq’s indebtedness and the issue of reparations are likely to be a source of tension between the new government and its neighbors.