Cost of restoring Iraq oil industry rises

Iraq will need an estimated US$1.6bn to restore its oil industry, acting oil minister Thamer Ghadhban said.

He said the rehabilitation of the oil and gas industry's infrastructure, hard hit both by the US-led war launched in March and by 13 years of UN sanctions, would be done chiefly by Iraqis, mostly working in the oil ministry.

An official plan unveiled in Washington on Tuesday estimated the price of restoring Iraq's oil and gas industry at about US$1.14bn and said the cost is rising amid sabotage and looting.

US$652m of the cost is related to two major contracts already put out to tender for reviving oilfields in the north and south of Iraq, the final work plan showed.

Other areas needing repair include gas facilities, the distribution network and refineries.

The plan was drawn up by officials of the Iraqi oil ministry, Coalition Provisional Authority, the US Army Corps of Engineers and contractor Kellogg Brown and Root.

Ghadhban said Iraq will recover its seat in OPEC "as soon as an Iraqi government is formed, which we hope will happen soon".