Major Iraqi fuel fieldsopen to development

Iraqis trying to fill their gas tanks faced miles-long lines in temperatures above 100 degrees Tuesday – a stark reminder that a country with one of the world's largest oil reserves still has major challenges delivering fuel to its people.

Oil Ministry spokesman Assem Jihad blamed the shortage on sabotage of a pipeline bringing crude oil from the southern fields to a refinery in Baghdad. He would not say how long the shortage would last.

The fragile nature of the Iraqi oil distribution system means that shortages appear from time to time. But this week's crunch seems worse than most.

Although unrelated, the long lines followed Iraq's announcement Monday that it was opening six major oil fields and two natural gas fields to development by foreign firms, which could lead to the biggest outside stake in Iraq's oil industry since it was nationalized more than 30 years ago.

The government hopes these contracts will boost oil production by 60 percent from levels that are already the highest since 2003.

Oil Minister Hussain al-Shahristani said the country expects to reap revenues of $70 billion by year's end if world prices remain high.

The official price for a liter of gasoline in Iraq is the equivalent of about 38 cents, or about $1.44 a gallon. The black market price can be almost three times that.

Falah Taweel, a gas station attendant scrambling to serve endless customers, said he blames the long waits on fuel shortages, rising summer demand and electricity problems.

“As official distributors, we are in a very bad situation. We can't meet the demand,” he said. Frustrated drivers behind him yelled at one another.