Jan. 30, 2008
Iraq Primed For Oil Windfall, U.S. Says
American Reconstruction Officials Say Better Production, High Prices Could Benefit Iraqis
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The Iraqi oil tanker Dijlah, Arabic for the Tigris River, is docked prior to its inauguration ceremony in Basra, Iraq's second-largest city, 340 miles southeast of Baghdad, Monday Dec. 17, 2007. It was the first Iraqi vessel registered for 30 years. (AP Photo/Nabil al-Jurani)
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Insurgent violence still hobbles the country's $114 billion reconstruction effort, and the possible flood of new money makes it all the more important for Iraqis to fight harder against corruption, said the quarterly report by Stuart W. Bowen Jr., special inspector general for Iraq reconstruction.
Iraq's oil production during the last quarter averaged 2.38 million barrels a day, the highest level since the 2003 U.S.-led invasion although still below prewar levels of 2.6 million, the report said.
That, coupled with record world oil prices, means that Iraq's national income could rise significantly in 2008, "creating the opportunity for significant economic investment," Bowen said in an interview Tuesday in advance of the report.
"How the government of Iraq manages that boon will in part determine the scope of the continuing success in Iraq," he said.
Iraq could get an extra $15 billion for its oil, he estimated. The nation's 2008 budget is about $48 billion with some 84 percent coming from oil. That was calculated using a $57-a-barrel price, whereas the U.S. Department of Energy now estimates the 2008 average price will be $85 per barrel, the report said.
"The possible rise in Iraq's revenue emphasizes the need for the government of Iraq to pursue its fight against corruption with renewed vigor" and for more progress on legislation laying out how oil profits will be shared among the Iraqi people, it said.
Endemic corruption such as theft, bribery, oil smuggling and fraud amount to what Bowen last summer called a "second insurgency" standing right behind violence as a top challenge to Iraq's development.
Previous reports concluded that U.S. efforts against corruption were disorganized, poorly managed and not given high enough priority. Wednesday's report said officials are reorganizing the effort in the U.S. Embassy in Baghdad to provide better staffing and give more attention to anti-corruption programs, on which the United States already has spent millions of dollars.
In other developments:
The Wednesday report also found, as did Bowen's October report, that violence still hampered reconstruction despite the much-promoted improvement in security in Iraq in recent months.
"Despite the palpably improved security climate, violence continues to impede the efforts of agencies working on Iraq's relief and reconstruction" and "poses a deadly threat," the report said.
There are attacks on both infrastructure and workers. U.S. diplomats and development workers are limited and sometimes barred from leaving the fortified Green Zone to visit Iraqi ministries, and auditors have been unable to visit some project sites because it is too dangerous.
Since the beginning of the U.S. reconstruction effort, 242 U.S. civilian workers have died in Iraq, seven in the past quarter, the report said.
Bowen noted that Iraq is a patchwork of security conditions, with more rebuilding progress being made in places like Anbar province in the west, where commanders say many al Qaeda fighters have been pushed out.
Places to which militants have fled, such as Diyala province to the east of Anbar and Iraq's third largest city of Mosul in the north, are still very difficult areas to work in, he said.
The report said Iraq needs to meet three important milestones in 2008. It must take more control over planning, managing and paying for projects; must take over from the U.S. management of projects already built; and must take more responsibility for security.
As of the end of December, the United States has appropriated $47.5 billion for Iraq's $113.95 billion reconstruction program. Some $35.5 billion of the U.S. money has been obligated and $29 billion spent on projects that include the effort to put in service new Iraqi security forces; rebuild and upgrade infrastructure to restore electricity, water and other basic services; and train Iraqis on governance issues.
The other money in the $113.95 billion total comes from Iraq - $50.6 billion - and the international community - $15.8 billion.
The massive effort has had mixed success. Most services still are lagging, some projects very poorly done and uncounted money lost to waste, fraud and abuse, officials have said.
Bowen said Americans should look at the expense as an investment to get infrastructure working again and services going again after the invasion.
"It was never intended to be a package for the complete reconstruction of Iraq. Therefore, as an investment in getting them started ... it worked," he said. "Did it work as well as we would have liked? No, it didn't."
© MMVIII, CBS Interactive Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.
Add a Comment See all 82 Comments
- How about if we took a fraction of the 720 million a day spent on blowing that place to pieces and used it towards turning their water back on giving them food and supplies or turning back on their electricity.Thats just a few things that might make that place less hostile. Just a suggestion. Silly me.
- Reply to this comment
- American Reconstruction Officials Say Better Production, High Prices Could Benefit Iraqis
Could Benefit Iraqis
Could Benefit Iraqis
THE KEY WORD IS COULD (Past tense) - Reply to this comment
- Shell is reporting record profits...Bush''s "base" rewarded itself by tripling the price of oil while their expenses were hardly changed.
Now Iraq will have more income to steal...if you think the filthy dog Koffi Annan and the UN crooks could siphon off the lucre...just watch the Quislings and the Occupation...No wonder Halliburton moved to Dubai...closer to the trough... - Reply to this comment
- I would Like to know when were suppose to start pumping the 2 trillion barrels of oil they found in Utah & Colorado were suppose to have the world''s largest oil deposit enough to last 500 yrs it''s suppose to be more oil than all the mideast countrys combined. What Bush and Chaney haven''t made enough money with there on oil company''s yet and our oil company''s haven''t put enough in there pocket''s at our expense yet.
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- Gooo! Haliburton!. Extra extra read all about it. *** Chenney''s stocks sore to 5000%. Stepping down as ceo and picking up stock was best investment!
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- speakinup,,, Fact girl, nothting but facts. The White House & intellegence agencies are all concerned about it ------- Bush had his chance at "Deciding" & allowed Yemen to become a major safe-haven for Al Queda -----
------ Of course if you were watching the friggin news instead of waging your war against Americans you might have seen it. - Reply to this comment
- This is good news since so much of our oil is under their sand.
Posted by singingrick at 01:36 PM : Jan 30, 2008
Then why rick, are you not in Iraq? Go get our oil! - Reply to this comment
- Bushes Administration is not different then Nixon. Cheney and Rumsfeld were both in Nixon cabinet. The Republicans were corrupt then, and they are even worse now...at least Nixon was impeached.
Posted by zoe2006 at 07:27 PM : Jan 30, 2008
Not exactly.
Nixon cut and ran. He resigned rather than face impeachment. - Reply to this comment
- You forgot all approved and paid for by the Democrat Controlled Congress.......
Posted by hillaryin08 at 04:28 PM : Jan 30, 2008
Bushs plan---all under Bushs watch!
He could have stopped it at anytime, but chose to use the authority of the "veto" to anything he didn''t agree with. - Reply to this comment
- Oh boy great news. Maybe now they can start paying their own way. Wasn''''t that the plan in the beginning? Iraq oil would pay for most of the war? As soon as we said that the bad guys messed up the works. Because of our left leaning media we couldn''''t surprise Al Qaeda about anything. Our war plans are immediately published. Worrying about the strength and stamina of our army etc etc. Tell the enemy your army is getting tired and then they know the plan to victory. Drag it out. We are our own worst enemy.
Posted by scottyusa at 05:03 PM : Jan 30, 2008
This a huge point!
I agree. Telling the enemy your withdraw date, saying that your military is broken, or is spread too thin, is not the message you want out there. The corporate media should know this by now. - Reply to this comment
- Wasn''t Iraqi oil supposed to pay for the war? What ever happened to that?
- Reply to this comment
- This is good news since so much of our oil is under their sand.
Posted by singingrick at 01:36 PM : Jan 30, 2008
How does that make it "our" oil?? - Reply to this comment
- "Yep thanks to Bush''''s appeasing terrorist,,, Al Queda is looking for several good men in Yemen where they are allowed to plan & recruit, & they are getting them from the Iraqi insurgents Bush created.
Posted by j-whitman
opinion or fact ? Did they catch someone ? - Reply to this comment
- --- The dumbing down of America continues ----
Posted by j-whitman
Would that be like Hillary claiming to be the best qualified for the job ?
I think he was talking about Mr G cleaned up NYC a modicum. Besides, at least Rudy wasn''t talking about himself. Hillary can''t find anyone to say nice things for her.
She hasn''t done anything that distinguishes herself from the other Senators. - Reply to this comment
- Oh boy,,,, McCain just called Rudy a national hero ------- Here we go again.
--- The dumbing down of America continues ---- - Reply to this comment
- Best news I''ve heard since Der Decider took office. Now they can rob us blind and feed billions to the new Islamic regime in BushDhad.
- Reply to this comment
- The better headline would have been --- ''Iraq Pimped for Oil''
- Reply to this comment
- Oh boy great news. Maybe now they can start paying their own way. Wasn''t that the plan in the beginning? Iraq oil would pay for most of the war? As soon as we said that the bad guys messed up the works. Because of our left leaning media we couldn''t surprise Al Qaeda about anything. Our war plans are immediately published. Worrying about the strength and stamina of our army etc etc. Tell the enemy your army is getting tired and then they know the plan to victory. Drag it out. We are our own worst enemy.
- Reply to this comment
- hillaryin08,,,,, Yep thanks to Bush''s appeasing terrorist,,, Al Queda is looking for several good men in Yemen where they are allowed to plan & recruit, & they are getting them from the Iraqi insurgents Bush created.
- Reply to this comment
- You forgot all approved and paid for by the Democrat Controlled Congress.......
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Posted by hillaryin08 at 04:28 PM : Jan 30, 2008
No hillary it was forced upon us by the Republicans controled congress and soon the swing voters will take even more vengence upon the neo cons party. - Reply to this comment
