Northern Oil Sales Resume As P.M. Says Sabotage Costs Iraq Dear

by Marwan Ibrahim
KIRKUK, Iraq, Aug 31 (AFP) - Northern Iraqi oil exports resumed Tuesday, offering a lifeline to Iraq's crucial oil industry, brought to its knees by sabotage attacks that have cost the government more than a billion dollars.
As Kirkuk sealed its first post-war term contract with a Turkish refiner, the Financial Times reported that near-daily attacks on infrastructure have ground Iraq's monthly oil revenues down to their lowest point in nearly a year.
With Baghdad facing a crippling foreign-debt burden and a dire need for nationwide reconstruction, Prime Minister Iyad Allawi said sabotaged pipelines and pumping stations had already cost Iraq more than a billion dollars.
Speaking at a meeting with sheikhs from the Baghdad slum of Sadr City on reconstruction projects, Allawi said relentless attacks on pipelines had siphoned more than one billion dollars out of the reconstruction budget.
"This money that we have lost is from the money for reconstruction. The treasure of Iraq is enough for the Iraqis to live respectably," he said.
A recent string of attacks have damaged several pipelines in southern Iraq, an area which accounts for 90 percent of exports from the country which sits atop the world's second largest oil reserves.
But in the main northern oil centre of Kirkuk, news of a first post-war term contract with a Turkish refiner seemed to indicate that security efforts were increasingly succesful in thwarting attacks on northern pipelines.
"Our first cargo of Kirkuk oil is being loaded," said an official from the Northern Oil Company on condition of anonymity, voicing hopes of sealing deals for 300,000 barrels per day in exports through term contracts.
Kirkuk oil was being pumped at a rate of 600,000 bpd Tuesday to the Turkish terminal of Ceyhan, NOC chairman Adel al-Kazzaz told AFP, but Iraq's State Oil Marketing Organisation has yet to set an official selling price for exports.
The overall rate was achieved by pumping only two or three days a week to top up stocks in Ceyhan, he said.
Kazzaz added that a second parallel pipeline had been operational for three weeks in order continue the pumping in the event of fresh attacks on one of them.
Attacks on northern pipelines had so far forced Kirkuk to auction off its crude at Ceyhan in mass tenders, but the deal reached with the Turkish refiner Tupras was the northern Iraqi city's first term contract since the war.
The deal offers more good news to a nervous oil market, which had already welcomed rebel Shiite cleric Moqtada Sadr's truce call late Monday by letting the price of a barrel drop below 42 dollars.
The resumption of sales could indicate better efforts to thwart sabotage attacks and was likely to relieve the southern terminals, which have also suffered a string of recent attacks.
Quoting US State Department data, the Financial Times said Iraq's crude revenues fell to 620 million dollars in the first 25 days of August, averaging 24.8 million dollars a day.
This was "sharply down" from 46.8 million dollars a day in July, and the lowest level since October 2003.
Exports for the same period meanwhile averaged one million barrels a day, well below 1.4 million in July and 1.8 million in March and April, the business newspaper said in a front-page report.
The decline occurred as world oil prices approached 50 dollars a barrel earlier in August. They have since eased back to around 42 dollars.
`According to a Southern Oil Company official, southern exports bounced back to their average level of 1.8 million bpd on Monday despite the latest sabotage attacks.