So What Was It For?

HOUSTON, TX, United States (UPI) — Former Iraq Oil Minister Issam Al-Chalabi paints a bleak picture for the future of Iraq`s oil industry, panning the result of the U.S.-led war, its insistence on passing an oil law, and the situation aboveground hampering development of the resources below it.

‘Iraq offers nothing but misery and mystery,’ Chalabi told a plenary this week during an international energy conference in Houston.

He drew his dire picture and prediction of Iraq during sessions on both global upstream oil and gas issues and Middle East geopolitics and energy at the Cambridge Energy Research Associates CERA Week conference.

‘I was in this hall exactly four years ago … and people realized by then the war was inevitable,’ Chalabi said. ‘So where do we stand today?’

The global energy information firm Platts reports Iraq`s production in January dropped to an average 1.66 million barrels a day from nearly 1.9 million in December.

Around 96 percent of Iraq`s budget comes from selling oil, and exports dropped to about 1.2 million barrels, Chalabi said.

Iraq has around 115 billion barrels of proven reserves, the third-most in the world, and analysts say much more have not been discovered.

Iraq has a capacity to produce nearly 3 million barrels per day but violence, a lack of electricity and the poor condition of the infrastructure is blamed for keeping production numbers well below the 2.6 million bpd pumped before the war.

‘They can`t increase; the only way is for production to go down,’ said Mohamed Zine, regional manager of the Middle East for energy analyst firm IHS.

‘There`s been no improvement, nothing,’ said Zine, whose views on the situation in Iraq are often less dramatic than Chalabi`s. ‘It`s getting worse.’

The northern oil pipeline from Kirkuk to Ceyhan, Turkey, is attacked enough to render it mostly inoperable. Most of the oil produced and exported is from fields in the south.

The January downturn is attributed to that violence, plus bad weather and stoppage for repairs.

Without naming names, Chalabi (no relation to Ahmed Chalabi, the Pentagon favorite whose faulty intelligence on Saddam Hussein was relied on to make the case for war) took digs at those who said or still say the Iraq war and occupation has been a success.