Oil rich Basra worries it is falling behind

Iraq will supply the world with its last barrel of oil, according to local lore, and that barrel will come from Basra. Sitting on an estimated 120 billion barrels of untapped crude, this southern province is key to Iraq’s economic future. Ed O’Keefe reports.

Iraq will supply the world with its last barrel of oil, according to local lore, and that barrel will come from Basra. Sitting on an estimated 120 billion barrels of untapped crude, this southern province is key to Iraq’s economic future.

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But local residents and officials worry that they are lagging behind their next-door neighbours, whose infrastructure and oil-drilling capabilities are far more advanced.

As the U.S. military prepares for an end-of-year deadline to leave Iraq, residents here are concerned that the central government in Baghdad will not be able to hold its own against those neighbours, which covet access to the nation’s vast resources and under-served markets.

Provincial leaders complain that Prime Minister Nouri al-Maliki’s government is more interested in doing business with Iran than in promoting their interests. The two countries last month signed agreements to work together on issues related to culture, science, technology and transportation, a move that Maliki said signalled “a new stage of cooperation.”

As the Iraqi and Iranian economies grow closer, however, officials in Basra say they believe that Iraqi leaders are allowing Iran to take the lead in extracting oil from border reservoirs that are accessible to both countries.

Senior government officials in Baghdad declined requests to comment on oil drilling along the borders.

Meanwhile, despite attempts by Baghdad to stop the project, Kuwait is moving ahead with plans to construct a multimillion-dollar seaport on Bubiyan Island, a strategically important location at the northern end of the Persian Gulf.