Ex Iraqi Oil Minister: Corruption Is Rife In Oil Industry
LONDON (Dow Jones)--Corruption as bad or worse than under Saddam Hussein is already creeping back into the Iraqi oil industry, a former oil minister said Wednesday.
"In Iraq nowadays, signs of corruption, commission and bribery have resurfaced and might be even at a larger scale than whatever happened during (the) Saddam Hussein (era)," Issam al-Chalabi, head of the Iraqi oil ministry shortly before the first Gulf War in 1990, told a London oil conference.
"Sales of oil should be transparent and not subject to interference of local or foreign agents," he said. He also said oil assets shouldn't be privatized.
"Irresponsible calls are made here and there threatening the ultimate role of the state over its national wealth. Privatization except in certain downstream facilities should never be realized as well as calls for mortgaging the oil," he said. He warned privatization could result in the stripping of state-assets seen in Russian privatization.
"Iraq can do without the lookalikes of Russian oligarchs. Any attempt to privatize upstream oil or even industrial plants, for that matter, will be no less dubious and even more harmful to the Iraqi economy than the murky privatization measures of Saddam Hussein in 1998, when a very few took over so much at a very low cost," he said.
Al-Chalabi also warned that Iraq's reservoirs, the second-largest in the world with at least 115 billion barrels of oil, are rapidly deteriorating because engineers are reinjecting harmful mixtures to get production levels back up.
Production needs to be capped at 2.2 million barrels a day for 2004, with exports limited to 1.6 million b/d to preserve the reservoirs from getting worse, and all reinjecting to boost well productivity has to stop, he said.
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