Oil revenues 15% short of target as sabotage takes toll


Oil revenues 15% short of target as sabotage takes toll
By Javier Blas in London
Published: January 8 2005 02:00 | Last updated: January 8 2005 02:00

Financial Times 8-9/1/5 p. 5.


Iraq oil revenues last year fell 15 per cent short of a target set by the interim government, as record high oil prices only partially compensated for the loss of exports due to sabotage on pipelines and pump stations.

US State Department figures show Iraq earned about $17.1bn (€13bn, £9bn) in 2004, 15 per cent off its $20bn target. Exports reached a year average of 1.47m barrels a day and net production, according to shipping sources, averaged 1.9m b/d.

The figures are well below pre-war forecasts. Some analysts had expected production at the end of 2004 would hit 3m b/d, but State Department figures show the country produced less than 2.2m b/d in December.

Thamer Ghadban, Iraqi oil minister, said recently: "We want to tell the Iraqi people that there is an all-out war against the country's oil infrastructure."

The Iraqi oil system suffered 146 attacks last year, according to the Institute for the Analysis of Global Security, a Washington-based think-tank. August and November were the worst months, with an attack almost every day. Exports in August dropped to 1.1m b/d, the lowest since September 2003.

Iraq is targeting production of 3m b/d for 2005 and exports close to 2m b/d. But analysts and industry officials say security has to improve before the country can reach those figures.

Exports of Kirkuk oil, piped trough Turkey, have been halted since mid-December as insurgents have sabotaged the pipe several times in the last four weeks.

"The situation is not improving, especially in the north," says a senior executive of an oil company.

Apart from export revenue lost, Iraq has been hit by severe shortages of fuel and electricity because attacks have also targeted domestic pipelines and refineries.