Iraq Interim Government Now Controls Oil Sector

The prime minister and oil minister said Tuesday the interim government has assumed full control of Iraq's oil industry ahead of the June 30 handover of sovereignty from the U.S.-led occupation administration.

"On Tuesday the most important natural resource has been returned to Iraqis to serve all Iraqis," Prime Minister Iyad Allawi said. "I'm pleased to announce that full sovereignty and full control of the oil industry has been handed over to the Oil Ministry and to the new Iraqi government as of Tuesday."

The announcement came as Allawi and Oil Minister Thamer al-Ghadhban toured the al-Doura oil refinery in southern Baghdad.

"We are totally now in control, there are no more advisers," Ghadhban said. "We are running the show, the oil policies will be implemented 100% by Iraqis."

Allawi said the handover of the Oil Ministry before June 30 reflects "our full confidence in the oil minister. It's evidence that Oil Ministry has worked perfectly.

Referring to the former regime of Saddam Hussein, Allawi said that "in the past, Iraqi oil was used in building palaces, buying weapons to achieve one person's goals."

The new government will have full control of the oil revenues, Allawi said, adding that Iraq is the "second largest country in oil reserves, it has more than 110 billion barrels of crude oil and about 100,000 trillion cubic meters of natural gas."

"We have to protect these precious natural resources," Allawi said. A force has been established solely for the protection of the oil infrastructure, made up of about 14,000 guards.

"This will help protect the oil pipelines and eliminate oil smuggling, with the help of coalition forces and Iraqi allies," Allawi also said. "By this, we shall serve all the Iraqis, instead of a small select group of criminals."

He urged the workers to continue "great efforts to return the oil Iraqi industry to its appropriate place in the world."

"We have ambitious goals for the future, to improve oil production in the future as well as to expand the production of gas," Allawi stressed.

The al-Doura plant, established in 1955, was mostly closed in May but is now working at just over 50% capacity due to the lingering shortage of crude oil.

Iraq faces an uphill battle in restoring its oil industry, essential for the country's reconstruction. The country's pipelines are frequently targeted by insurgents opposed to the U.S.-led coalition authorities.

Al-Doura's maximum capacity is 110,000 barrels a day, Hani Jerges, chief engineer at the plant's control unit, said, and it is directly connected to the pipelines from Basra in the south and Kirkuk in the north. The plant, which dominates the skyline in southern Baghdad, produces mostly gasoline and diesel fuel.

Allawi also expressed confidence that the U.N Security Council will adopt a new resolution on Iraq imminently.

"Discussions are still ongoing in the Security Council, the entire process has been very favorable," Allawi said. "We expect a favorable resolution by either tonight or tomorrow, we hope it will come to a successful conclusion very soon."