WASHINGTON (Reuters) - Attacks on Iraq's oil installations are becoming better organized and more concerted, particularly in the northern oil fields, a senior U.S. official said Wednesday.
Michael Mele, Iraq program manager for the U.S. Army Corps of Engineers, which is overseeing the restoration of Iraq's oil fields, said the volatile security situation was the biggest obstacle to reconstruction of the crucial industry.
"Sabotage obviously continues to be a concern. It looks like it is more concerted and better organized than it has been in the past," Mele told Reuters on the sidelines of a reconstruction conference on Iraq. . . .
Mele said the U.S. Army Corps of Engineers and its contractors were being much more cautious and low-key over where they worked in Iraq.
"We are not advertising or announcing what we are working on, where improvements are being made, especially in the northern oil fields," he said.
Production in those fields has been crippled by bomb attacks on pipelines and other facilities, which the U.S.-led coalition blames largely those loyal to toppled President Saddam Hussein and outside groups helping them.
Mele declined to provide details of recent attacks on oil pipelines and installations or the extent of the damage and how much work had to repeated due to sabotage. This information, he said, was classified.
UP TO PREWAR LEVELS
Oil production in Iraq is up to its prewar levels of about two million barrels per day, and Mele said about three-quarters of that was being exported.
"As soon as we get tankers into port, we fill them up and ship the oil out. In the north, it's a different story," he said, adding that oil had to be transported via vulnerable pipelines from the north.
The Corps of Engineers' main contractor in Iraq is Kellogg Brown and Root, a subsidiary of Texas company Halliburton Co., the oil services firm once run by Vice President Dick Cheney.
Speaking to the conference, Halliburton executive George Sigalos said two KBR contractors had been killed so far in Iraq, six sub-contractors had died, four KBR staff were wounded and four sub-contractors were missing.
"You have to be diligent about security," he told the conference, packed with about 400 company representatives eager for new business in Iraq.
Two follow-on contracts to replace KBR's no-competition deal issued in March are set to be announced by mid-January, although Mele said he hoped the decision would be made this month.
The amount for the two deals was doubled in October to $2 billion, following a spate of attacks on oil facilities.
By last week, KBR had been given $1.72 billion in business and Mele said the Texas firm would continue its work until the follow-on contracts were awarded. KBR has also bid for that work.
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***** Pentagon delays award of Iraq oil contracts again Reuters, 12.02.03, 12:35 PM ET By Sue Pleming
WASHINGTON (Reuters) - The U.S. military said Tuesday it had again extended a deadline for awarding two new contracts to repair Iraq's oil fields, giving Vice President Dick Cheney's old firm Halliburton more time under its no-competition deal.
The U.S. Army Corps of Engineers said in October it would replace by the end of December a no-bid deal given in March to Halliburton subsidiary Kellogg Brown & Root, which by last week had clocked up more than $1.72 billion in business.
But Army Corps spokesman Bob Faletti said the "deadline window" had been extended until Jan. 17, 2004. An announcement would be made between Dec. 15 and Dec. 17, he said. . . .
In the meantime, he said KBR, which has also bid on the new deals, would continue its work in Iraq.
"This is not about KBR, it is about having a good solid contract," he said, rejecting past criticism that delays served to give KBR more lucrative business in Iraq. . . .
The work given to KBR in Iraq has been strongly criticized by Democrats, who allege cronyism and favoritism in handing out the deals and claim that KBR is overcharging for some of its services.
Aside from the oil fields no-bid deal, KBR has a separate logistics contract with the military, with tasks ranging from building bases to delivering mail and feeding U.S. troops.
Last week, three Democratic lawmakers asked the Pentagon's inspector general to investigate alleged overpricing of gasoline sent to Iraq by KBR.
Halliburton has strongly denied overpricing of gasoline into the oil-rich country, which has suffered an oil shortage because its refineries are not running to capacity.
Companies interested in the new contracts include Halliburton, a U.S.-British joint venture between Fluor Corp and AMEC Plc and another pairing between U.S. Parsons Corp. and Australia's Worley Group.
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