Saturday, May 12, 2007
(Reuters) - Billions of dollars' worth of Iraq's declared oil production over the past four years is unaccounted for, possibly having been siphoned off through corruption or smuggling, The New York Times said on Saturday. Between 100,000 and 300,000 barrels of Iraq's daily output of roughly 2 million barrels is missing, it said, citing a draft report prepared by the U.S. Government Accountability Office and government energy analysts which is expected to be released next week.
The discrepancy was valued between $5 million and $15 million daily, using a $50 per barrel average, the report said. That adds up to billions of dollars over the four years since the March 2003 U.S.-led invasion of Iraq. The newspaper was provided the draft report by a separate government office that received a review copy.
The GAO declined to discuss the draft, the paper said. The report did not make a final conclusion on what happened to the missing oil, and provided alternative explanations besides corruption or smuggling, including possible Iraqi overstating of its production. A State Department official who works on energy matters offered possible explanations including pipeline sabotage, or inaccurate reporting of oil production in southern Iraq.
"It could also be theft," the Times quoted the unnamed official as saying, with suspicion falling on southern Shi'ite militias. "Crude oil is not as lucrative in the region as refined products, but we're not ruling that out either," the official said."There is not an issue of insurgency, per se, but it could be funding Shia factions, and that could very well be true.""That would be a concern if they were using smuggling money to blow up American soldiers or kill Sunnis or do anything that could harm the unity of the country," the Times quoted the official as saying.
The newspaper characterized the report as the most comprehensive look thus far at what it called faltering U.S. efforts to rebuild Iraq's oil and electricity sectors. The GAO tapped experts at the Energy Information Administration within the United States Department of Energy for its oil analysis. Erik Kreil, an oil expert at the administration who is familiar with the analysis, said a review of industry figures worldwide indicated Iraq's stated production figures did not add up.
"Either they're producing less, or they're producing what they say and the difference is completely unaccounted for in any of the places we think it should go," Kreil told the Times. "Either it's overly optimistic, or it's unaccounted for." Analysts outside the government said such a large discrepancy indicated that there was either a major smuggling operation in place or that Iraq was not generating accurate production figures, the newspaper added.