GLOBAL GUERRILLA TARGET: IRAQI OIL PRODUCTION

Global guerrillas operating in Iraq have been spectacularly successful. May's oil exports averaged only 0.86 m barrels a day. June's numbers are likely worse. In general, global guerrillas have limited Iraq's oil exports to less than 1/3 of those anticipated by the US coalition planners (the domestic consumption baseline of over ~.6 m barrels a day skews the impact). As this continues over the next three years, Iraq can anticipate a shortfall of nearly $70 billion in oil revenue. The current $10 b a year in export revenue only generates ~$450 per capita in income, far less than needed for basic services, and light years away from the tens of billion of investment necessary (much more than $40 is needed for the oil industry alone) for infrastructure repair and expansion.

The costs of defending against these attacks goes beyond lost oil export revenue. Over 1/3 of Iraq's men in uniform have been dedicated to the defense of critical infrastructure. Mercenary outfits like Erinys (whose contract was just extended) are making money hand over fist providing 14,000 guards for the oil industry. Over 25% of all reconstruction dollars are currently being spent on private security. This distraction prevents the allocation of critical security resources to the discovery and elimination of the networks and financiers driving the bazaar. It is very reminiscent of the guerrilla strategy used by Lawrence of Arabia (who started operations just a few miles from where bin Laden was born and raised) against the Turks in 1916-17.

Global guerrilla attacks against the Iraqi oil industry are not only increasingly sophisticated, they are also multiplexed (which means they attack along different vectors). Additionally, the frequency of attacks have been high enough to keep defensive forces off balance. Tactics used by global guerrillas so far in the 130+ attacks on the Iraq oil network fall into three categories:

• Pipeline disruptions. Over one hundred attacks against the 4,300 miles of Iraqi oil pipelines have been made. These attacks increasingly target remote sections of pipeline, junctions, large capacity pipelines, and pumping stations; all of which serve complicate repairs. Many of these attacks have destroyed critical equipment that is in short supply.
  
• Assaults against oil industry personnel. Targeted assassinations (or attempts) as well as a general lack of security (Iraq's roads are free fire zones) have led engineering companies working on oil infrastructure to depart the country.
  
• Facility and dependent infrastructure attacks. 33 attacks have been made against oil and gas pipelines that feed refineries around Baghdad, particularly the huge Bayji refinery complex north of the city. A control room and warehouse for a gas plant was burned. A water treatment facility used to process water for the oil industry was disrupted. Over one hundred attacks against electricity infrastructure have impaired the functioning of electricity intensive oil production equipment.

This data demonstrates that the most effective start-ups in Iraq's bazaar of violence are global guerrilla networks. They have shown an ability to attract (either through ideology or money) the oil industry personnel with the vital data needed to make these attacks effective. Global guerrillas have stayed small to keep OPSEC (operational security) extraordinarily high -- coalition and government agents haven't been able to penetrate their networks. They have made attacks that have had incredible ROI (rates of return on investment) and have suffered few casualties. They are able, despite their small numbers, to keep a nation-state in failure. They are so successful as entrepreneurial start-ups, Geoffrey Moore should write a book on them.

It's only a matter of time before these entrepreneurs move to Saudi Arabia. There is a large pool of global "hot" money ready to fund this effort. The diminishment of the current monarchy will make many people very, very rich. A large series of attacks sponsored by the OBL venture capital network may be all it takes to provide the Kingdom with a bazaar of its own.

Comments

[Watching Them, Watching Us]

One of the terrorists' sources of intellengince about the precise vulnerabilities of the pipeline infrastructure could easily be the "14,000 security guards" who are supposed to be guarding it in the first place.

Whose direct corporate profit interest does a sustained campaign of attacks directly benefit, especially in the run up to a contract extension deadline ?

If you are a low paid "security guard", albeit one armed with an AK47 and a corporate badge, why would you not be vulnerable to bribery or coercion, to provide information or to "look the other way" during an attack ?

Who exactly controls and audits these para military "security" contracts ?