Mar 25, 2006
Iraq has signed two deals for a metering system to track oil and gas flows, the Iraqi mission to the U.N. said, a step that could help get its economy back on track and reduce oil smuggling.
Iraq has signed a preliminary agreement by which the Royal Dutch/Shell Group will advise the Oil Ministry on setting up a system to measure oil and gas flow inside Iraq, as well as for imports and exports.
It has also signed a deal to rebuild the metering system at its Basra port. That agreement was reached with the U.S. Project and Contracting Office, which oversees infrastructure construction in Iraq.
The agreements were announced in a letter from Iraq's Deputy U.N. Ambassador Feisal Istrabadi to the International Advisory and Monitoring Board, the U.N. office that monitors Iraq's oil revenue. The letter was dated March 22 but made public Friday.
The board, established in 2004, has urged Iraq to install metering equipment in accordance with standard oil industry practices.
Iraq's economy has been severely weakened by oil smuggling to neighboring countries, a problem that could be checked in part by the presence of a metering system. The smuggling has created a fuel crisis that leads to occasional shortages even though Iraq is one of the world's leading producers of oil.
Some experts believe that oil smuggling may be funding Iraq's insurgency.
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