Iraq Oil Report

Iraq is now producing as much power as it did on the eve of the US-led invasion of 2003 but is still meeting barely 50 percent of peak demand, a senior electricity ministry official said.

“2008 is the first year when production has reached the level prior to that of Saddam Hussein’s fall,” the ministry’s operations and control chief Adel Mahdi told AFP in an interview. “But we still need much more.”

Current production stands at 5,302 megawatts, virtually the same as the 2002 level of 5,305 MW, Mahdi said.

But demand has risen sharply over the same period, forcing the ministry to continue rationing domestic supply. The average household still receives just six hours of power a day from the national grid.

Iraq has halted oil exports through its northern pipeline to Turkey, Reuters reported.

The line is Iraq’s secondary export route, handling about 430,000 barrels per day. Most of Iraq’s crude shipments sail from its main southern oil terminal at Basra, at a rate of about 1.6 million bpd.

Exports through the northern line from Iraq’s Kirkuk oilfields stopped early on Tuesday. The reason for the halt was unclear, but the flow has been regularly interrupted during the past month.

Jordan seeks Iraqi natural gas to supplement its imports from Egypt, Xinhua said.

Minister of Energy and Mineral Resources Khaldoun Qteishat said Jordan was making contacts with Iraq to develop gas fields and examine the possibility of allocating part of their production to Jordan.

According to Qteishat, Jordan’s needs of gas for industrial purposes until the year 2017 stands at 1.5 billion cubic meters a year, which cannot be met by the Egyptian gas import only.

Flush with oil revenue, Iraq has budgeted $50 billion so far – as much as the United States – to rebuild the country. This month, the US Government Accountability Office predicted that the Iraqi government could end the year with a $79-billion budget surplus.

But Iraq has been slow to spend its money. By March, the latest month for which data is available, it had spent only 2.7 percent of its budget, according to a quarterly report released last month by the US special inspector general for Iraqi reconstruction. By contrast, the United States has spent nearly all of the money it has appropriated, writes Anna Badkhen for The Christian Science Monitor.

The slow pace of reconstruction frustrates Iraqis, who are struggling with staggering unemployment, power outages, water shortages, and streets choked by sewage and trash. Many are particularly exasperated by such projects as the beautification of the road to Baghdad International Airport.

Iraqi Ministry of Oil’s, MOO, technical staff were able to put gasoline production units of Daura Refineries (Midland Refineries Company – MRC) back into service, after few days of shut-down, Voices of Iraq reported.

“Daura Refineries resumed producing gasoline, after repairing a technical malfunction that occurred days ago,” ministry spokesman Asim Jihad said.

“Produced gasoline reached distribution points,” he said.

“On Monday, MOO supplied 6.450 million litters of gasoline to gas stations,” he added.

“The MOO has enough gasoline to cover citizens’ needs,” he noted.

“Wake up, America. We went into Iraq for oil,” said prepared remarks by Ohio Congressman Dennis Kucinich for the Democratic National Convention Tuesday. “The oil companies want more. War against Iran will mean $10-a-gallon gasoline. The oil administration wants to drill more, into your wallet. Wake up, America. Weapons contractors want more. An Iran war will cost 5 to 10 trillion dollars.”

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