IPEA
Following the siege and
capture of Baghdad by the Americans, law and order were lost almost all over
Iraq, and the police and security forces were scattered by the invasion forces.
The empty streets of Baghdad and the lack of security allowed for the looting
and destruction of most public and government buildings. The oil industry in Iraq
suffered most from the looting and steeling of equipment, materials and
vehicles. The houses in Burjesia, Basrah and Arafa, Kirkuk were confiscated by
different groups of looters and the residents of these houses were thrown out.
In these hostile environments, the management of the oil industry lost control
and were unable to prevent any of the unlawful actions against the oil
installations. The newly formed mafias found an easy way to start a very
lucrative business, which involve the smuggling of Crude Oil and Oil Products.
Things were easy for the smugglers because the “Coalition Forces” did not take
any action to stop these illegal operations. Below is some of the information about the smuggling operation.
I. Crude Oil:
a)
Few days after the capture of the Oil Fields in the southern part of
Iraq rumors spread about moving big quantities of Crude Oil loaded on trucks
across the Kuwait-Iraq borders. This was shown on one of the Arabic Satellite
TV Stations, which was showing one of the South Oil Company officials (Mr.
Mahdi Badie) who was in-charge of the Fields Operation at the time. He was
interviewed while a long line of trucks was moving behind him. He said that
these trucks are loaded with Crude Oil and are moving to unknown destination at
the same time the camera showed a number of American armed cars with soldiers
guarding the convoy of oil-loaded trucks. This operation continued for more
than three months.
b) The smugglers invented other ways of lifting
crude oil by setting a filling station on the crude oil pipelines crossing near
Al-Zubair Bridge on Shatt Al-Basrah. Small barges are loaded with crude oil and
tugged to load it into a larger tanker anchored outside Khor Al-Zubair. The
waterways of Shatt Al-Basrah and Khor Al-Zubair were well controlled by the
British armed forces and not even a tiny boat can sail through these waterways
unnoticed, so how is it possible for 500-ton tugs to move up and down these
water ways without the interference of the British forces.
Reliable sources said that the
whole smuggling operation was filmed on video by officials of the South Oil
Company (SOC) and was handed over to the British-American officials in Baghdad
and Basrah. The answer was that the Coalition Forces have more important things
to do than running after local thieves and smugglers.
2. Oil Products:
a). Cross-border
smuggling:
This operation is taking place
through all borders of neighboring countries, but it is most concentrated
through the Jordanian borders, the Syrian borders and the north area of Iraq
(Kurdistan). Big quantities of fuel oil and gas oil are moved through these
outlets. This operation has big impact on the local market; the shortage of oil
products makes it difficult for the people to get their needs. People have to
stand in lines for hours on petrol stations, this situation created black
market which is controlled by smaller groups of mafia These groups sell the
products to the public at sky-high prices, on the streets in small plastic
containers which are unsafe and many accidents happened due to the improper
handling of oil products.
b).
Smuggling through Shat Al-Arab Waterway:
The oil products are
transferred by trucks from different places. The cost of the products
(FOB) Shatt Al-Arab loading points is as follow:
• Gasoline (benzene) = 70$/ton
• Gas oil = 60$/ton
• Fuel oil = 40$/ton
These products are loaded into
small barges (500-1000 tons), then moved to Gulf States and Iran, where they
are sold for twice their loading prices.
It should be noted that the
cost of these products to the Ministry of Oil is as follow:
• Gasoline (benzene) = 360-380
US$/ton
• Gas oil =240-260US$/ton
• Fuel oil =120-140US$/ton
The prices for the consumers
are compensated by the Ministry of oil to be as follow:
• Gasoline =50 ID/liter (about
25US$/ton)
• Gas oil =20 ID/liter (about 10US$/ton)
• Fuel oil =18 ID/liter (about 9US$/ton)
* Note:
Dated 9 January 2004. The
Iraqi Petroleum Experts Association (IPEA) issued an earlier version of this
report during the first meeting of the Association in Baghdad on the 29
November 2003.
The IPEA is ready to cooperate
with any organization or individuals who can help to put an end to the drainage
of the main source of income for the Iraqi people.