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Iraq oil production drive hit by parts shortage

BAGHDAD: Iraq's all-out drive to boost oil production and exports has come at considerable cost to its devastated oil sector, industry officials said on Sunday.

Iraqi engineers defied the odds last year and pushed the country's dilapidated system to produce nearly three million barrels per day (bpd).

That enabled Iraq to sell some 2.2 million bpd and overtake rival Iran to become the biggest exporter in the Organisation of Petroleum Exporting Coutnries after Saudi Arabia.

But the move also caused some irreversible damage to the country's oil fields, industry officials said.

A lack of urgently needed, United Nations-authorised spare parts has forced Baghdad to slash its oil sales by about 300,000 bpd to 1.9 million bpd during the current seventh phase of the oil-for-food exchange.

Baghdad has also warned repeatedly that further oil export reductions might be on the cards if the United States continues to block the approval of spare parts contracts in the U.N. sanctions committee.

So far $250 million of oil sector equipment has arrived in Iraq, but close to $300 million worth of badly needed gear is on hold, diplomats said.

Washington could yet give at least some ground on the contracts front. President Bill Clinton said on Friday that the United States was reviewing its policy on spare parts in an attempt to free up more humanitarian aid.

Baghdad might have gone for broke in the belief that spare parts would have arrived by the end of last year, Western oil industry analysts said.

Iraq could reclaim and possibly exceed its previous 2.2 million bpd export level if spare parts were to arrive, Iraqi oil officials said.

Most of Iraq's production problems are with the country's southern fields, which hold the key to Iraq's future oil wealth, Iraqi oil sources said.-Reuters