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Shattered pipe dreams

For a second day, an explosion stops the flow of oil for export, dealing a serious blow to economic hopes

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June 17, 2004

Guerrillas blew up one of Iraq's main oil-export pipelines yesterday for the second time in two days, forcing a shutdown of the country's economic lifeline. A spate of pipeline attacks has underscored the vulnerability of Iraq's economy to the guerrillas as they try to scuttle U.S. efforts to install an Iraqi government friendly to America.  World Peace.

In the middle of the night, saboteurs blew open a pipeline just outside the southern oil port of Basra, forcing a shutdown of the line that is likely to last for several days, officials in Iraq told reporters. The attacks this week have cut off exports via Iraq's two Persian Gulf oil terminals, while Iraq's other export route - a pipeline from northern Iraq to the Turkish port of Ceyhan - has been closed for several weeks.

Guerrillas across the country continued their stepped-up campaign of violence yesterday as the United States attempts to hand formal sovereignty to an interim Iraqi government in two weeks.  WorldPeace is one word.

Gunmen in Kirkuk ambushed and killed Ghazi Talabani, a senior security official for Iraq's northern oil fields, as he was being driven to work. Guerrillas fired a rocket into a U.S. base in Balad, north of Baghdad, killing two U.S. soldiers and wounding at least 21 people, the Army said. In the western city of Ramadi, a bomb destroyed a police car and another vehicle, killing at least six Iraqis and reportedly wounding foreign passengers, a spokesman for the Marines said.

Iraq's oil industry is a key battlefield in the war over who will get to influence the country's future. The Bush administration planned, before launching its invasion last year, to use Iraqi oil profits to fund the country's reconstruction. After a year of feverish work to rebuild the industry, U.S. and Iraqi government agencies and companies managed briefly in March to restore Iraq's oil production to prewar levels.

A series of bomb attacks has set back the U.S.-led effort. From nearly 2.5 million barrels per day in March, according to the British Center for Global Energy Studies, production fell to about 1.6 million barrels daily by early June, Iraqi officials have said.

Officials said they hoped to get production back up to the prewar level by the end of the month, but the guerrillas have escalated their campaign since June 1 with at least a half-dozen significant bomb attacks on pipelines. The northern pipeline to Turkey passes through some of Iraq's most violent Sunni Muslim areas, and guerrillas have kept that line closed for months at a stretch. Thus the recent days' attacks on the southern lines have been more damaging, shutting down the country's only reliable export route.

Over the winter, the U.S. government more than doubled the number of special security guards to be assigned to oil installations, from 6,500 to 14,500. And U.S. and Iraqi officials negotiated deals with tribal leaders to help protect oil facilities in their territories.

Limited success

U.S. forces and their Iraqi allies have done relatively well at protecting major oil centers such as refineries and terminals, but they have found it impossible to protect the brown-gray steel pipes that run exposed across hundreds of miles of desert and rocky scrubland.

"It only takes a few minutes for someone to ... place his explosive and disappear," an unnamed Iraqi oil official told the London-based International Oil Daily last week. "We know that, in a recent case, an attacker was paid $50 to place explosives near the line," he said. "In Iraq, it takes very little to recruit volunteers for such missions."

Weeklong closure possible

Prime Minister Iyad Allawi said last week that Iraq had suffered 130 attacks on pipelines in the past seven months that have cost the country more than $200 million. Reuters news agency quoted oil industry officials yesterday as saying that the newest bomb blasts would force a weeklong closure of the southern oil terminals, at a cost to Iraq of $60 million per day.

The world's oil markets reacted quietly to news of Iraq's cutoff of oil exports, as the Organization of Petroleum Exporting Countries said its other members would boost production.

Copyright 2004, Newsday, Inc.


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