Sun, May 13, 2007 - Page 1 News List

Billions in Iraqi oil money missing: US government report


Billions of dollars' worth of Iraq's declared oil production over the past four years is unaccounted for, possibly having been siphoned off through corruption or smuggling, the New York Times said yesterday.

Between 100,000 and 300,000 barrels of Iraq's daily output of roughly 2 million barrels is missing, it said, citing a draft report prepared by the US Government Accountability Office (GAO) and government energy analysts that is expected to be released next week.

The discrepancy was valued between US$5 million and US$15 million daily, using a US$50 per barrel average, the report said. That adds up to billions of dollars in the four years since the March 2003 US-led invasion of Iraq.

The newspaper received the draft report from a separate government office that received a review copy. The GAO declined to discuss the draft, the paper said.

The report does not present a conclusion on what happened to the missing barrels, but it provided alternative explanations besides corruption or smuggling, including possible Iraqi overstating of its production.

A State Department official who works on energy matters offered possible explanations, including pipeline sabotage and inaccurate reporting of oil production in southern Iraq.

"It could also be theft," the Times quoted the unnamed official as saying, with suspicion falling on southern Shiite militias.

"Crude oil is not as lucrative in the region as refined products, but we're not ruling that out either," the official said. "There is not an issue of insurgency, per se, but it could be funding Shia factions, and that could very well be true."

"That would be a concern if they were using smuggling money to blow up American soldiers or kill Sunnis or do anything that could harm the unity of the country," the Times quoted the official as saying.

The Times characterized the report as the most comprehensive look thus far at what it called faltering US efforts to rebuild Iraq's oil and electricity sectors.

The GAO tapped experts at the Energy Information Administration within the US Department of Energy for its oil analysis.

Meanwhile, five soldiers were killed yesterday and three reported missing after an attack south of Baghdad, the US military said, amid reports that the three troops had been captured.

"This morning at 4:44am in Iraq, a coalition force team of eight soldiers -- seven Americans and an Iraqi army interpreter -- were attacked 20km west of Mahmudiyah," said spokesman Major General William Caldwell.

"As a result of this attack, five soldiers were killed in action and three are currently missing," he said, without clarifying whether the dead were all US soldiers or whether the Iraqi interpreter was among those killed.

"At the time of the attack, a nearby unit heard explosions and attempted to establish communications, but without success," he said in a statement.

"Coalition forces arrived within an hour, secured the site, and immediately initiated a search. The names of the soldiers are being withheld pending final identification and notification of next of kin," he said.

"Make no mistake -- we will never stop looking for our soldiers until their status is definitively determined, and we continue to pray for their safe return," he added.

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