REPORTER: Paul McGeough
Baghdad swelters in summer, the mercury hovers at 50 celsius - or more and this year there’s a cruel double whammy - along with the searing temperatures, Ramadan decrees that most Baghdadi’s cannot eat or drink during daylight hours. They may crave a cool drink or even air conditioning but there’s just a few hours of electricity per day from the national grid.
Here on the banks of the Tigris River this former office block houses, 70 squatter families. On the seventh floor Ishmael Mohammad Khan and his family are breaking their day- long fast, his wife, Zaheda Salem sums up the dilemma for Iraqis.
ZAHEDA SALEM (Translation): That’s our situation, we are powerless, powerless. We want clean water but there is none - the whole of Iraq is without clean water, not only us.
And with no power - it’s a long climb up seven flights …
ZAHEDA SALEM (Translation): The stairs are a problem we can’t overcome ….with shopping we have a long rope with a hook tied to it – we pass it down to the street, they hang the shopping on the hook and we pull it up. We are the richest country in the world, but right now – we are the poorest n the world.
Across town the baker Bassem Ali and his staff are hard at work. Iraqi eating habits demand freshly-baked bread for each meal, but Ali also struggles without power…
BASSEM ALI (Translation): The electricity here is not good at all, it might come on for an hour a day – then it goes off.
REPORTER: It affects your work?
BASSEM ALI (Translation): Of course, electricity is crucial – but there is no electricity and no one is working on it. We use generators and petrol is dearer than electricity.
But fuelling the generators is no easy matter …
BASSEM ALI (Translation): Even to obtain petrol is difficult because the petrol station has no electricity.
There are private generators all over Baghdad … and this spaghetti mess of cables - proof of how the owners gouge neighbours for an extra buck. Adel Zeidan is another businessman trying to turn a profit …no problem you’d think for an ice maker in a heatwave. But he also needs generators for power too …
ADEL ZEIDAN (Translation): This year is different from other years, this year the crisis is worse because there is no electricity and the security situation is zero – murders and robberies happen daily in the street.
Aside from a depressing diet of violence, Iraqi’s have been waiting seven months, since elections back in March for their bickering poltiticians to form a government…
ADEL ZEIDAN (Translation): Most of these problems exist because there is no government. With a strong government providing electricity, people would not need ice factories.
And this is another enormous frustration for Iraqi’s, their oil rich nation cannot refine enough of the stuff to fill the bowsers. They resent queuing for hours but for now there’s no alternative.
This is perhaps the easiest and the safest way to move through the streets of Baghdad, if you look out the back and out the front, you will see we have a police escort with an armed gunner sitting up on a turret on each vehicle. We are heading to the Dora Power Station, this is one of the classic examples of what is wrong with this country at the moment, it floats on about a quarter of the world's energy resources but it can't energise itself. The big question that the international community and the local leadership needs to answer is, can Iraq get its act together and if it doesn't, what are the consequences?
Even from outside, you can tell the power station is an industrial relic - demanding investment for years, but receiving little. And inside it gets worse, in fact, the creaking turbines here starved of fuel and spare parts crank out only half the power that was produced under Saddam.
I'm given a guided tour by Sinan Taha, an engineer - he was a mere student back when Saddam was deposed. Given the state of this place, it's hard to imagine that the US has spent $5 billion on restoring power in Iraq - 200 million of it here at Dora.
SINAN TAHA, ENGINEER (Translation): Rehabilitation needs solid foreign companies, like siemens and General Electrics, but the problem has been with contracts or companies refusing because of lack of security – they refuse to come and work here in Iraq.
And here in the antiquated nerve centre there's not much to do and not much that the engineers and technicians can do to boost the paltry power load. Taha tells me Iraq's rampant corruption is another reason his power plant can't deliver.
SINAN TAHA (Translation): When the Americans came t hey did not solve the problem, Bechtel was going to do the overhauling but there was administrative corruption in the contracts – so the overhaul was nominal – the units stayed the same – they didn’t improve or increase their capacity.
From the highway south of Baghdad driving to the holy cities of Karbala, and Najaf, but look at these walls – look at these communities, the entire community is glass walled against the rest of the world and notwithstanding that there are killings on a daily basis, bodies are found in the streets. The new Iraq is still a very insecure place.
The armed convoy we're travelling with is part of the Iraq oil police a heavily armed force of 5,000 whose job is to protect 7, 500 km of oil pipeline and the nation's vital oil installations.
MAJOR GENERAL HAMID ABDULLAH IBRAHIM (Translation): The pipes are laid starting from Basra - from Basra, here.
Our journey starts following a briefing from the man who commands this oil army, Major General, Hamid Abdullah Ibrahim.
MAJOR GENERAL HAMID ABDULLAH IBRAHIM (Translation): It exists for the protection of the oil sector, which represents the nervous system of Iraq’s economy. That is why I feel it is my sacred national duty to protect the oil sector.
We want to see what the general calls the central nervous system and I explain in an interview with a Sydney radio station why that system has broken down.
“There are a whole lot of reasons. During the worst of the insurgency periods the whole grid system and the power stations were targets for insurgency bombings.”
Soon Iraq's endless desert begins to unfold before us.
REPORTER: When will this be put in the ground?
Major Ghassab is in charge of the pipeline security in this area. Major Ghassab’s job is to protect generally what is not seen - you've got these mounds of earth out here which tell us there are four strands of the strategic pipeline buried there. We can actually get a sense of it today, because they're building this extra capacity pipeline here. He's got about 600 men, 200 km of this vital asset for the Iraqi economy, and they've got to protect it, they have to protect it against smugglers, they have got to protect it against insurgency and terrorist strikes.
But the pipe is 2 metres underground, here is the obvious target a pressure valve. This is Major Ghassab's worst nightmare - the results of an insurgent strike on a pipeline. Terrorist attacks like this were once common, but to oil commanders like Brigadier Abdul Karim Salem - smuggling is now a greater threat.
BRIGADIER ABDUL KARIM SALEM (Translation): The terrorist operations would not be taking place without the theft of the oil. The most important reason behind stealing oil is to fund terrorist operations.
The brigadier is remarkably courageous talking about his job or he is just plain crackers, he doesn't mince words when it comes to bureaucratic bosses, he says they're politically appointees, describing them off camera and stupid oil thieves.
BRIGADIER ABDUL KARIM SALEM (Translation): The right man in the right place is not applied here.
REPORTER (Translation): So there’s financial corruption?
BRIGADIER ABDUL KARIM SALEM (Translation): Yes, there is financial and administration corruption, and cronyism on top of that.
Back at the pipeline, Major Ghassab is not concerned about bureaucrats right now, he prefers to dwell on the dream of Iraq's future.
REPORTER: This is part of the dream to produce 12 million barrels a day?
MAJOR GHASSAB (Translation): Yes, of course – that is Iraq’s dream.
REPORTER: It’s a big dream.
MAJOR GHASSAB (Translation): As long as we get some money for it.
The dream may be just that, Western diplomats in Baghdad say 12 million barrels a day is pie in the sky. They reckon the Iraqis simply are not up to achieving a five fold increase on current production levels.
Today we're heading south to Basra, a high-speed run across the broiling desert. We see the first of the flairs, the Dante-esque markers that signal under this barren surface lie untapped riches, billions of barrels of oil and natural gas, too. And there's other tell tale signs, an increasing number of oil tankers, thundering along the highway. Basra is dry and dusty, and the legacy of war is not hard to find, but this town is about to boom with new hotels a hospital financed by the Saudis, a water treatment plant, electricity generation and of course foreign investors. The good times can't come soon enough for Basra's mayor, Mr Jaber. Angry crowds rioted here in June over power outages and a lack of clean water, one demonstrator was killed and insurgent attacks continue.
MR JABER, BASRA MAYOR (Translation): Despite the security operations and some breaches, Basra enjoys stability in the area of security which made it able to attract numerous companies, including international companies for the first, second and third rounds of oil permits.
These nationally televised oil licence auctions drew all the big players in the oil game, Europe,Russia, China, South America. But there was also a big surprise - US companies have substantial existing contracts, but they won just one of the major new licences on offer from Baghdad.
THAMIR GHADBAN, GOVERNMENT ENERGY ADVISOR: Well, I can't really explain why, but what really, what is significant is that this proves that the Iraqi government did not really deliver Iraqi wealth on a golden plate to any company.
And here is part of the glittering prize for the oil companies. One of the last great oil bonanzas left on the planet – Rumaila - the worlds’ second biggest oil field. It is literally hard to comprehend the volumes of oil that BP Iraq boss Michael Townsend and I are striding over here.
MICHAEL TOWNSEND, BP IRAQ: This field is truly a gigantic scale, its foot print is 20km wide, but it's 80km long and underneath the ground, we're standing on here, are a number of reservoirs, there's four or five really major reservoirs. Since the 50s, most of the oil has only been produced from one of those reservoirs.
This one reservoir provided billions of barrels of oil and currently produces one million barrels a day. BP and their Chinese and Iraqi partners plan to bring that up to 3 million barrels a day. That's what the oil men call a supergiant field - second only to Saudi Arabia's mega Ghawar Field.
Back in the Baghdad office it's time to file to the Herald in Sydney. With the sort of oil riches we've just seen, Iraq's future would seem assured. But with no government or legislation to rev up the creaking industry and divide the spoils fairly, what price the great dream of oil wealth and prosperity for this war scarred nation? Thamir Ghadban is a former oil minister and is now energy adviser to the government.
REPORTER: The people of Iraq when you talk to them seem to be almost contemptuous of the ability of people like yourself to make this dream become a reality and for them to get some benefit of it.
THAMIR GHADBAN: I don't blame any Iraqi who will look at it in a contemptuous way or doesn't believe it, because they went through very, very difficult times.
Granted Iraq has suffered three wars since 1980, 13 years of UN sanctions and the collapse of the entire system post the fall of Saddam. But now new laws setting out how to distribute the vast oil wealth of the country are stuck in the Parliament.
THAMIR GHADBAN: There will be a committee or a commission to be formed and there's a draft law for that already.
REPORTER: But this law has not been enacted?
THAMIR GHADBAN: No. I cannot - I cannot really defend any record, any failing. I believe it is possible to reach consensus even if we amend the draft in one way or another.
More delay is not what this man wants. Oil Minister Husain al Shahristani has come to a media dinner in Baghdad, but runs into a very frustrated guest.
GUEST (Translation): Your Excellency, from Yousifeya to Msayab, no petrol station has any petrol – go toKarbala, you’ll see they are all empty. No inspection? No accountability? I go to Karbala three times a week and they never have petrol. Yousifeya, Mahmudeya, Latifeya…
Shahristani faces the almost impossible task of kick starting the resurrection of Iraq's oil industry, while the squabbling factions can not agree on who should govern the country. He's also acting Electricity Minister and he was embarrassed by yet another black out here which threw his guests into darkness. At a post dinner press conference I was keen to ask him why of all the IOCs - the international oil companies - the big US companies had missed out on new contracts.
MINISTER SHAHRISTANI: No, that's not true, as a matter of fact all the major IOCs and mostly they are American companies, both Exxon Mobil, British Petroleum is more American than British now, and so far have signed all contracts.
But the minister figures he must placate different audiences, he addresses Iraqi disquiet about any American involvement when he sings a very different tune in Arabic to the local media.
MINISTER SHAHRISTANI (Translation): A few moments ago I was asked by Australian television to explain why large American companies don’t have Iraqi oil contracts. This refutes the rumours that Americans came to takeIraq’s oil, as the contracts did not go to American companies. If politics had any influence, we would have noticed it in the field.
Iraqis say they have negotiated the world's best terms for the sale of their oil and analysts agree. While his guests continue their feast the minister slips into the night. The lights may stay on here for a few more hours but this jolly little party is a far cry from the reality of daily living for millions of Iraqis. A life without power - spent wondering if they will ever benefit from their nation's wondrous treasure trove of oil and gas.
GEORGE NEGUS: Clearly where Iraq is concerned it ain't over yet folks - at least until the fat oil man sings. You can read Paul's extensive report on Iraq's vital oil reserves in tomorrow's edition of the Sydney Morning Herald, he will be on line for a chat on our website straight after the programme, there is also on line a photo gallery and a blog about the challenges Paul and Ryan faced in Iraq and a chat with Paul about whether or not oil can save that violence-ridden country.
Reporter
PAUL MCGEOUGH
Producer
GEOFF PARISH
Field Producer/Camera
RYAN SHERIDAN
Editor
WAYNE LOVE
Translation/Subtitling
ENAS IBRAHIM
JOSEPH ABDO
Original Music composed by
VICKI HANSEN
17th October 2010