Corruption, smuggling threaten Iraq oil

Corruption and smuggling in Iraq's oil industry have become the biggest threat to the country's economy, a report says.

    Frequent attacks on oil pipelines have prevented development

    The report, prepared by the office of the inspector general of Iraq's oil ministry, said the only solution is a crackdown by Iraq's government.

    "The corruption in the oil sector and smuggling of oil products to neighbouring countries are the most important reasons behind the loss of billions of dollars, and these two problems are the biggest threat to Iraq's economy," the report said.

    Corruption and smuggling, combined with frequent attacks on oil pipelines in the north by insurgents, have prevented Iraq from rebuilding its battered oil infrastructure, said the report, released by Assem Jihad, the spokesman for the inspector general's office.

    "For example, about 20 percent of the oil products that Iraq imported last year, worth US$4.2 billion, were smuggled to neighbouring countries," the report said.

    "Crude oil produced in Iraq also was stolen from its pipelines."

    Action urged

    The report urged Iraq's parliament and Jawad al-Maliki, the prime minister-designate, to crack down on the corruption and smuggling, and to better protect oil plants and pipelines from attacks by insurgents.

    Al-Maliki is trying to form a cabinet from Iraq's complex mix of Shias, Kurds and Arab Sunnis, and one of the more important portfolios will be oil minister.

    Oil production has stagnated, averaging 2.05 million barrels a day in mid-March, short of the 2.5 million-a-day US goal and far short of Iraq's production peak of 3.7 million in the 1970s.

    Fewer than one-quarter of the American-funded rehabilitation projects for the oil industry have been completed.

    Iraq's proven oil reserves, estimated at 110 billion barrels, are the world's third largest after Saudi Arabia and Canada.

    But Iraq's oil production is so poor that the country is forced to import oil.

    SOURCE: Unspecified


    YOU MIGHT ALSO LIKE

    Interactive: Coding like a girl

    Interactive: Coding like a girl

    What obstacles do young women in technology have to overcome to achieve their dreams? Play this retro game to find out.

    Why America's Russia hysteria is dangerous

    Why America's Russia hysteria is dangerous

    The US exaggerating and obsessing about foreign threats seems quite similar to what is happening in Russia.

    Heron Gate mass eviction: 'We never expected this in Canada'

    Hundreds face mass eviction in Canada's capital

    About 150 homes in one of Ottawa's most diverse and affordable communities are expected to be torn down in coming months