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Rebuilding the oilfields Putting out the fires will be easy. Repairing the wells won't be.
By Nelson D. Schwartz

(FORTUNE Magazine) – However long the battle for Baghdad lasts, one thing is clear: Reviving Iraq's oil industry will take months. U.S. contractors say the country has the most decrepit energy infrastructure they've ever seen--and rebuilding will be tough and risky.

As the Iraqis abandoned the huge Rumailah field on the first night of the war, they placed mines around wells and gathering stations. "There have been some fairly elaborate booby traps," says Maj. Mike Murdoch of the Royal Irish Regiment. His sappers call them "victim-initiated bombs"--explosives that detonate when soldiers or oil workers use a particular radio frequency.

Smoke billows from the six wells the Iraqis set afire before they fled, but it could have been much worse. The contractors from Halliburton (see "Will Halliburton Clean Up?") and Boots & Coots feared that thousands of wells would be set ablaze. Boots & Coots president Brian Krause says his ten-man team should be able to put the fires out within weeks. But in the meantime more than 10,000 barrels of oil--worth over a quarter-million dollars--goes up in smoke daily.

At a gas-oil separation plant near the town of Safwan, twisted metal and garbage litters the ground near rusting tanks and valves. Even the lampposts jut out at crazy angles. "If this is any indication of what the rest of their facilities look like, it's a miracle they kept the oil flowing," says Wes Jordan, project manager with Halliburton's KBR division.

Once the oil starts moving out of Basra and other ports near the Persian Gulf, it's likely to ease tight global supplies and bring crude prices down sharply. Before that happens, though, contractors like Jordan, military sappers, and the Army Corp of Engineers face long days and nights. Says Jordan, a 23-year oil veteran: "These are the worst conditions I've ever seen." --Nelson D. Schwartz