Oil pipeline in Iraq a shambles: Pentagon watchdog

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http://today.reuters.com/stocks/QuoteCompanyNewsArticle.aspx?view=CN&storyID=2006-08-01T031924Z_01_N31369076_RTRIDST_0_ENERGY-IRAQ.XML&rpc=66

WASHINGTON, July 31 (Reuters) - A plan to rebuild a 30-mile (50-km) pipeline from Iraq's Kirkuk oil field to the Baiji refinery to bring the Iraqi government badly needed cash is years behind schedule with no sign it will ever be finished, an independent watchdog said on Monday.

A total of $82 million from the coalition force's Development Fund for Iraq was allocated for the pipeline repair but it was not clear how much had actually been spent, said the independent Office of the Special Inspector General for Iraq Reconstruction in a report.

Kellogg, Brown and Root, a Halliburton (HAL.N: Quote, Profile, Research) subsidiary which was originally supposed to build the pipeline, gave varied estimates of the actual cost of work performed, ranging from $1.8 million in March 2004 to less than $1 million in June 2004, the report said.

It subcontracted out much of the project to Iraq's State Company for Oil Projects, or SCOP, a company the report called inexperienced. Three places where the pipeline crossed canals were originally to be done by KBR but its contract was terminated and given to Parsons Iraq Joint Venture, or PIJV.

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1. Oil pipeline = bomb bait

That's why the pipeline the Bushies planned for Afghanistan will never get built. Every pissed off insurgent or minority group could blow it up as fast as it is built.

It's interesting how oil, which is the biggest freebie in the world, natural resources-wise, never seems to make its owners wealthy, apart from a priviliged few. It's the Exxons of the world that get rich, while the normal citizens, who theoretically own the oil, get nothing. Except, to a limited extent, in Venezuela.

I wonder what percentage of its yearly net profits Exxon pays out in bribes to corrupt governments. I bet it's a very small percentage, and the best investment anyone has ever made. Totally illegal and corrupt, of course, but very lucrative.