Iraq oil production; still a horrible failure

These guys were sooooooo wrong. What a bunch of half-wits.

Deputy Defense Secretary Paul Wolfowitz told the House Appropriations Committee March 27 reconstruction could largely be covered by proceeds from Iraqi oil and foreign donations.

"There's a lot of money to pay for this. It doesn't have to be U.S. taxpayer money. And it starts with the assets of the Iraqi people. They will now own those assets instead of a dictator that owns them, and they should spend them for their own welfare," Wolfowitz said. "We are dealing with a country that can really finance its own reconstruction and relatively soon."

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"It is not wise to seek to put any more debt on to the Iraqis, even if it's in the form of collateralizing future oil revenues which also has the disadvantages ... of making it look as if we -- even no matter how you do it -- we are in some way taking a lien against oil revenues and therefore that's why we fought the war," Bremer told the Senate Appropriations Committee Sept. 25.

Michigan Democrat Sen. Carl Levin presented an amendment Friday to have Iraq finance its reconstruction by getting a loan on the world capital market to be secured by its oil wealth and guaranteed by the United States.

GAO: Iraqi Oil Sector in Tatters
July 19, 2007 02:52 PM ET

Even after spending $2.7 billion in U.S. reconstruction funds, Iraq's oil sector has failed to achieve any of the goals to boost production, according to a new report by the Government Accountability Office.

Indeed, the highest production levels were reached back in 2004 and have not been equaled since then. In addition, the State Department's oil data for Iraq may dramatically overstate the actual production levels by as much as $5.5 billion a year, because of inadequate metering, corruption, theft, and sabotage. Security remains the biggest of the challenges, but future investment will be difficult as well.

Nearly 80 percent of U.S. funds destined for the oil sector have already been spent and the rest of the international community has yet to offer any of its own financial support.

For its part, the Iraqi government has failed to spend more than 3 percent of the $3.5 billion it approved for oil reconstruction projects last year. On the political side, the Iraqi government's effort to pass laws to govern exploration and revenue distribution for the oil sector remain stalled and foreign investment will be minimal until that legislation is in place.

--Kevin Whitelaw