Basra, Iraq – An Iraqi state-owned company has been given the job of repairing oil wells that sit on large, lucrative reserves in the country’s south – a decision likely to mean additional months of delays for an industry suffering from sabotage and lost revenues.
The decision by U.S. reconstruction officials came after American and other Western companies balked at doing the work without strong legal protections guaranteeing they would not be blamed if things went wrong.
Iraqi authorities had promised such protections, according to American officials, but concerns about the Iraqi government’s stability prompted Western companies to demand the guarantees from Washington.
U.S. officials announced the decision to use the Iraqi Southern Oil Co. after several inquiries by The Associated Press.
American officials are training employees and buying them equipment. The training probably will cause delays, whereas a Western firm already would have the needed expertise.
That means the project could take months longer at a time when delays come at a high price. With the price of oil topping $60 a barrel, the Iraqi government is losing hundreds of millions of dollars in potential revenue from the wells.
