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Last Updated: Wednesday, 16 June, 2004, 22:16 GMT 23:16 UK
Attacks halt Iraq oil exports
Firefighters at pipeline
Iraq's main oil export route will be out of action for several days
Iraq's oil industry has been brought to a virtual standstill after several attacks by saboteurs on pipelines in the north and south of the country.

Experts say the southern pipeline could take at least a week to repair, costing hundreds of millions in lost revenue.

The security chief for the northern oil fields, Ghazi al-Talabani, was gunned down on Wednesday in Kirkuk.

He is the third official in recent days to be killed in the run-up to the 30 June handover of power to the Iraqis.

In Baghdad, US Deputy Defence Secretary Paul Wolfowitz met leaders of the incoming Iraqi government to discuss security issues.

Mr Talabani died in a hail of bullets on his way to work. His driver was seriously wounded.

It came after saboteurs blew a hole in the key southern pipelines for the second time in 48 hours.

"Due to the damage inflicted on the two pipelines, the pumping of oil to the Basra oil terminal has completely stopped," said Samir Jassim, spokesman of the state-owned Southern Oil Co. "Exports have come to halt."

In other developments:

  • Three US soldiers were killed and at least 23 people injured in a rocket attack in the city of Balad, 75 kilometres (45 miles) north of the Iraqi capital, the US military said.

  • In Ramadi, west of Baghdad, a bomb killed nine people, including four foreigners, Iraqi doctors said.

  • Radical Iraqi cleric Moqtada Sadr has told his militia to leave the southern city of Najaf, the scene of frequent clashes with US-led forces in the past.

  • Officials in Beirut say a Lebanese man, Habib Samour, abducted in Iraq has been freed after spending almost a month in captivity.

The key southern oil terminals are expected to remain shut down for several days following the attacks - with a loss of revenue running into hundreds of millions.

Iraq's main source of income comes from the sale of oil, which is also seen as fundamental to the country's reconstruction programme.

In addition, the BBC's economics correspondent says that, with global demand for oil remaining strong, international markets can not easily cope with a prolonged interruption.

Crippled exports

The attacks cut off all crude oil exports from Iraq's southern terminals in Basra and Khor al-Amaya, which had been handling virtually all the country's exports.

The southern terminals were exporting 1.6m barrels of oil a day, and the aim had been to increase output to 2m barrels a day by 30 June.

Chart showing Iraqi oil production in 2003 and 2004
Benchmark oil prices edged up in both New York and London on Wednesday following news of the attacks.

A pipeline in northern Iraq was bombed on Tuesday evening, but exports had already been crippled as a result of previous attacks.

The pipeline from the oilfields around Kirkuk to Ceyhan in Turkey has barely been in operation since the March 2003 US-led invasion because of repeated sabotage.

Iraqi oil exports are still below the pre-war level, even though a 14,000-strong Iraqi guard force has been set up specifically to protect pipelines and other vital parts of the oil infrastructure.

Iraqi Prime Minister Iyad Allawi says pipeline sabotage has cost the country more than $200m in lost revenues over the past seven months.




WATCH AND LISTEN
The BBC's Orla Guerin reports from Baghdad
"These are dangerous days"



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