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XI. Oil

Reopen Pipelines and ports.  Establish trading partners and return to world oil economy.  Invest in new technology, drilling, and refining technologies. 

Saddam’s Legacy

Oil is the most abundant natural resource in Iraq, and with 112 billion barrels, Iraq has the second largest proven oil reserves in the world. It has the theoretical potential to produce 3 million barrels a day. However, economic sanctions, technological isolation and economic mismanagement resulted in severe constraints on oil production. Moreover, the continued sabotage by Saddam loyalists and foreign terrorists and looting in some sections of the country damaged the infrastructure and caused interruptions to the flow of crude to the refineries. Difficulties due to outdated technology and poor maintenance at the refineries themselves and interruptions to the flow of refined product to the cities have created the need to import more petroleum products than originally projected. The main products required are liquefied petroleum gas (LPG), used for cooking; kerosene, used for heating in the winter months; benzene, for auto fuel; and diesel, to fuel larger equipment and power generation.

Coalition Activities to Improve Oil Sector

CPA partners are focusing on activities that will:

· Repair and restore the oil infrastructure to pre war levels.

· Establish a professional security force to secure Iraq’s oil infrastructure

· Ensure enough petroleum-based products are imported into Iraq to augment refinery production and meet country’s basic power, transportation, and residential needs.

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