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Attacks cease on Iraq's pipeline, oil exports boom

BEIJI, Iraq -- For more than two years the attacks came like clockwork. As soon as the military secured and workers repaired the pipelines from Iraq's northern oil fields insurgents would strike.

But roughly three weeks ago they suddenly stopped, letting crude oil flow freely from Iraq's vast reserves near Kirkuk.

Perhaps insurgents feared reprisals in Salahuddin province, where pipelines from Kirkuk flow to the country's largest refinery in Beiji. Terror leader Abu Musab al-Zarqawi's death maybe disrupted a chain of command that ordered the attacks, military officials said.

Whatever the cause, US forces welcome the change, even if history since the US-led invasion in 2003 has shown the free flow of oil in Iraq is only temporary at best.

``I just hope that it lasts long enough where people start realizing ` We're making money. We could be rich like Kuwaitis,' " said Army Lieutenant Colonel Craig Collier, deputy commander of the 3d Brigade, 101st Airborne Division. ``But what is really going on? We don't know."

In the past three weeks, Iraq has exported 6.2 million barrels of crude oil to Turkey from its northern fields. Total exports from Iraq in that period, including the oil fields in the south, have increased to 2.5 million barrels per day, the highest level since the invasion, the Oil Ministry reported.

With a $60 a barrel market price in Turkey, military officials believe exports so far equate to about $372 million since oil began flowing from the north. Oil is the biggest source of income for the Iraqi government, which is struggling to curb violence and restore the supply of electricity and water.

Iraq, a founding member of the Organization of Petroleum Exporting Countries, sits atop the world's third-highest proven reserves. With an estimated 115 billion barrels, exceeded in OPEC only by Saudi Arabia and Iran, the Bush administration predicted three years ago that Iraq would finance its own reconstruction.

But Iraq's oil production slipped after the invasion, stuck below even the reduced levels that prevailed in the 1990s, when the country was under tough UN sanctions.

The 3d Brigade, nicknamed the ``Rakkasans," has studied the intricate web of oil corruption near the refinery in Beiji as part of a renewed effort to restore the oil industry.

Working with other coalition and Iraqi soldiers, they targeted oil smugglers, who they believe are behind many of the attacks on the fuel export lines. The black market truckers buy gasoline or diesel at Iraq's government-subsidized prices and drive to Turkey to sell it for 10 times the amount, so official exports compete and cut into their profits.

Despite scores of arrests, the attacks still came -- always as the oil storage reservoirs near Tikrit neared capacity at 1.5 million barrels. The timing was so perfect that the military suspected an insider at the refinery in Beiji or the oil fields directed the strikes.

Ties to the insurgency also were suspected.

Iraq has the capacity to ship a half million barrels a day from its oil fields to the refinery, so disabling the pipeline makes a major dent in revenue to the cash-starved government. Insurgents also could be profiting directly with a share of black market revenue, military officials said.

When pipelines are down, excess oil is shipped from Kirkuk to the refinery in Beiji -- oil that would normally be exported. It is routed back to the refinery to keep workers employed and gasoline available. The refinery and its neighboring power plant, which supplies electricity as far as Baghdad, are the largest industries in northern Iraq.

The back flow of oil to Beiji also increases the opportunity for criminals to divert oil for the black market, said Captain Adam Lackey of Trafalgar, Ind., a commander in the 187th Infantry Regiment.

And there's no telling how high in government those who profit sit, he said.

``The web goes all the way to Baghdad and back, when we're talking about who takes money and who benefits," said Lackey, who works with city officials in Beiji and Siniyah, both near the refinery, to help secure the oil infrastructure.

Whether the break in attacks is a sign of progress or only periodic calm, oil is flowing fast.

This week, oil minister Assem Jihad said 1.6 million barrels per day was being exported from the southern port of Basra while Iraq's North Oil Company was pumping 300,000 barrels per day from Kirkuk to the Turkish port of Ceyhan.

``With the new plans adopted by the ministry, we hope to add 200,000 to 300,000 barrels per day before the end of this year," Jihad told the Associated Press on Wednesday.

It's a nervous moment for Iraqi and US officials, both of whom realize that the eventual departure of US soldiers hinges on economic recovery and improved security.

Collier said he hopes the flow will continue. But he's hesitant.

Whether the attacks have stopped due to increased security measures, higher expectations among Iraqis, or a combination of factors, he can't tell.

``It's like you're in a fun house of mirrors and you're playing chess," Collier said. ``You may be making absolutely the right move. You may be doing something really stupid. You just don't know."

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