The final two burning wells in Iraq's Rumaila oil fields near Kuwait should be under control in two weeks, a U.S. military spokesman said yesterday. That would remove a major obstacle to a resumption of production from the southern fields in the months ahead.
The fields still must undergo a close examination before wells flow again, and more critically, the Bush administration and United Nations officials still must reach agreement on who will control future Iraq oil sales. British authorities have said it will take several months to bring the field back into operation, but oil industry experts say it could be much sooner than that.
Crude oil for May delivery rose 88 cents yesterday, or 2.9 percent, to $31.04 a barrel on the New York Mercantile Exchange, as prices continued to edge upward after an initial plunge at the beginning of the Iraq war. But even with the recent rebound prices are still about 20 percent below the highs reached just before hostilities began.
As U.S. and Kuwaiti firefighters continued to work to bring Rumaila back into operation, the Bush administration was focusing on Iraq's northern oil fields around Kirkuk, coveted both by Turkey and Kurdish opposition forces based just east of the city.
Secretary of State Colin L. Powell will head to Ankara today, officials said, seeking to nail down Turkey's commitment not to send troops into Iraq. That assurance could become critical if U.S. forces lead Kurdish troops in a battle to secure the Kirkuk fields from Iraq. Turkey has said it would invade Iraq to keep Kirkuk out of Kurdish control. The Bush administration has vowed that Kirkuk and Rumaila's oil wealth will be safeguarded for a united Iraq's future needs.
The uncertain fate of the Kirkuk fields has not been a big factor in oil markets over the past week, some analysts said. "The market is counting on the Rumaila production to come back and that's probably enough," said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Mass.
Crude oil prices would shoot up temporarily if Iraqi forces blow up wells in the Kirkuk fields, Lynch said, but should eventually fall back to current levels as long as Saudi Arabia and other Persian Gulf states continue to deliver oil at high levels.
With their increased production, which began in February, the 10 members of the Organization of Petroleum Exporting Countries received an estimated $57.6 billion from oil exports in the first quarter of 2003, according to estimates by the Center for Global Energy Studies in London. That is the highest quarterly revenue total since a previous spike in oil prices in the fourth quarter of 2000.
Staff writer Kenneth Bredemeier contributed to this report.