Iraq’s Oil Goes Missing — Oil Metering System Not Installed

WASHINGTON, D.C. A draft report released last week says that hundreds of thousands of barrels of Iraq’s oil have gone missing each day since the U.S. invaded.

A final conclusion was not drawn in the report prepared by United States Government Accountability Office; however, there is reason to believe widespread corruption and smuggling took place over the last four years.

The report estimated that between 100,000 and 300,000 barrels of oil a day have disappeared to the tune of between $5 million to $15 million daily.

The State Department has given a number of possible reasons for the discrepancies, such as sabotage of pipelines, false reporting of production capabilities, and outright theft.

The suspected thieves include Shiite militias and Sunni insurgents, according to one department official.

Still, the conditions for such thievery have been perfect because the Iraq oil industry remains broken, said Pratap Chatterjee, the managing director of CorpWatch and author of the book, Iraq, Inc..

Chatterjee explained in an interview with Democracy Now that two oil service companies have failed to meet their contractual obligations to fix Iraq’s oil infrastructure: Parsons and Halliburton. One of those important obligations was to meter the oil production which is a normal industry practice, he noted.

“In four years, they have failed to repair and failed to calibrate the oil meters in the platforms. They’ve just finished repairing it,” he said. “Even the most complex meters take no more than a year to set up, and yet they have not been calibrated. And so, oil is being stolen right under the noses of US officials from the oil platforms out in the Arabian Gulf.”

The State Department has agreed with this assessment, adding that Shell Oil was under contract to study the meters.

Another independent oil industry analyst told The New York Times that the report about Iraq’s missing oil comes as no surprise because of the many other reports saying as much. Philip K. Verleger Jr. added that the market for this smuggled oil might include China, Europe, and the Caribbean, all of which have small refineries outside the control of the West.

The GAO report also notes that American taxpayers have been on the losing end of this malfeasance. About $5 billion of taxpayer funds has been spent on rebuilding Iraq’s electricity infrastructure. Almost none of the goals for those funds have been met, the report said. Iraq’s power grid, for example, averages only 8.6 hours a day nationwide.