U.S.-funded projects to repair Iraq's oil industry have run into severe delays, damaging efforts to raise output needed to raise funds for post-war reconstruction, according to an internal Oil Ministry report.
The report, seen by Reuters, shows that work has begun on only 119 out of 226 post-war projects, most of which were awarded to U.S. oil giant Halliburton or its subsidiaries.
No project has been finished and only half the work has been completed in 94 of those under way, the recently prepared report says.
A senior Iraqi industry insider said many of the problems were not security-related, although violence in Iraq has aggravated them. "These projects were due to be completed between July last year and April," he said.
Halliburton officials in Baghdad and Kuwait were not available for comment.
The projects, jointly identified by U.S. and Iraqi officials, include water injection plants, surface work, communications, maintenance on oil wells and other facilities.
Iraq's oil sector was in poor shape after last year's U.S.-led invasion because of post-war looting, combined with the effects of more than 12 years of U.N. sanctions and damage suffered in three wars in a quarter of a century.
Iraq now exports around 1.6 million barrels per day (bpd), compared to around two million before the invasion and more than three million before the 1990 Gulf war.
Apart from the problems with the U.S.-funded projects, guerrilla attacks on contractors and infrastructure and lack of funding for the Oil Ministry's own projects helped to derail plans to raise exports to two million bpd by March 2004.
Iraq's U.S.-led administration has delayed releasing $1.5 billion that was to have come from this year's state budget to fund Oil Ministry projects, financed by oil revenue deposited in a U.S.-managed bank account, Iraqi officials say.
These funds were separate from more than $1 billion of U.S. money spent so far on the Iraqi oil sector.
The Coalition Provisional Authority (CPA) released around $800 million of Iraqi oil funds to the ministry two months ago for projects to raise output, the officials say.
CPA officials could not immediately be reached for comment.
Thamir Ghadhban, the new oil minister in the interim government formed this month to take over from the CPA on June 30, said last week he remained confident Iraq would reach pre-war output of three million bpd by the end of this year.