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Iraq's oil future may be vulnerable after US exit

Published: Saturday, Sep 4, 2010, 22:13 IST
Place: Baghdad | Agency: Reuters

After an explosive device tore through the back of an armoured SUV carrying Chinese oil workers in Iraq in mid-July, security contractors said the US military, not China's Daqing Petroleum, was the likely target.

The Explosively Formed Projectile, designed by Iran's Revolutionary Guard Corp and often used by Shi'ite militia in Iraq, shredded the rear of the car and exited on the other side just behind the passenger seat.

Three Chinese workers, who were helping develop Iraq's biggest oilfield Rumaila, received scratches and light burns. One security guard sitting in a front seat was hit by fragments.

Oil companies so far have shrugged off security concerns after sealing a dozen deals in Iraq, which have the potential to quadruple the country's production capacity to rival Saudi levels of 12 million barrels per day.

"We have not had indications of international oil companies being targeted in any sense, and I think at the end of the day that will depend on what will be the motivation for those attacks," said a foreign oil executive working in Iraq.

US military officials also said they did not think Shi'ite militia were targeting oil workers or facilities in the July 15 attack. "I think it is only a possibility," said major general Stephen Lanza, the US military spokesman in Iraq.

Yet after US forces ended combat missions in Iraq on August 31 and cut their numbers to 50,000 7-12 years after the invasion, some security firms and Iraqi officials are wondering whether Sunni Islamist insurgents and Shi'ite militia might now focus on the companies developing the vast oil reserves.

In a statement posted on a radical Islamic website last month, a writer called for attacks on oil pipelines across Iraq on the grounds that oil was a main reason behind the invasion of "Muslim homes by atheist and disbelieving countries".

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