US says attacks cost Iraq 16 bln dlrs in oil exports

WASHINGTON, Sep 29 (Reuters) Iraq lost billion in oil export revenue for about a two-year period and has not been able to maintain adequate electricity supplies due, in part, to insurgent attacks on the country's energy infrastructure, the US government's independent inspector on Iraqi reconstruction said in a new report.

''A number of factors, including attacks, aging and poorly maintained infrastructure and criminal activity are adversely affecting Iraq's ability to develop a viable energy sector,'' said Inspector General for Iraq Reconstruction Stuart Bowen.

''These factors have combined to hold down Iraq's oil exports and the availability of electricity,'' Bowen said in an unclassified summary released yesterday of a still-classified audit report prepared in late July.

The report said Iraq lost a potential billion in revenue from oil exports between January 2004 and March 2006.

Iraq's oil sector, which the Bush administration hoped would be a big revenue raiser to help rebuild Iraq, has been subjected to repeat attacks on its pipelines and oil export facilities. Iraq has the world's third largest crude oil reserves at 115 billion barrels.

Despite its huge oil holdings, Bowen noted, Iraq is paying billions of dollars to import gasoline and other refined petroleum products for its citizens.

The United States has invested about 0 million to improve Iraq's capability to protect its oil and electricity infrastructure, the inspector general said.

Bowen said the new Iraqi government must take ''bold action'' to protect the country's energy sites, and he noted Iraq's leaders are pursuing initiatives to enhance security and performance of the oil and electricity infrastructure.

Iraq's oil production averaged 2.2 million barrels a day in August, based on the latest estimate from the US Energy Department.

The country's oil exports have been running at almost 1.7 million barrels a day in September.

Those levels are far below pre-war conditions, when energy experts had estimated that Iraq pumped between 2.8 million and 3 million barrels per day and had a net oil export potential of 2.3 million to 2.5 million bpd.

Key to boosting Iraq's oil production is investment by foreign energy companies in the country's underdeveloped and undiscovered oil fields.

Iraq says it needs up to 20 billion dollars in investment to increase its oil production to 6 million barrels a day.

However, many foreign oil companies are reluctant to do business in Iraq because of the country's ongoing violence.

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