New attack on oil pipeline in Iraq, top oil security official slain

BAGHDAD, Iraq (AP) - Saboteurs blasted a key southern pipeline for the second time in as many days Wednesday, shutting down Iraq's oil exports, and gunmen killed a security chief for the state-run Northern Oil Co.

Later Wednesday, a rocket slammed into a U.S. logistics base near the city of Balad, killing two U.S. soldiers and wounding 26 people, the military said. Balad is 50 miles north of Baghdad.

The military statement did not specify whether the injured were U.S. soldiers or included civilians or others on the sprawling compound.

The latest attacks at Iraq's oil sector have slowed the process of reviving its economy after decades of war, international sanctions and Saddam Hussein's tyranny. Insurgents also are targeting the country's infrastructure apparently to undermine confidence in the new government, which takes power from the U.S.-led coalition June 30.

"What you are seeing here is effectively a terrorist war against Iraq's critical infrastructure, including the oil infrastructure," coalition spokesman Dan Senor told CNN. "It is an effort to basically, economically, impoverish the Iraqi people."

Elsewhere, radical Shiite cleric Muqtada al-Sadr ordered members of his militia to leave the holy cities of Najaf and Kufa unless they live there, fulfilling a key aspect of an agreement meant to end fighting between his forces and U.S. troops.

Wednesday's attack north of the town of Faw crippled two already damaged pipelines, forcing authorities to stop the flow of crude oil southward to the Basra oil terminal on the Gulf, said Southern Oil Co. spokesman Samir Jassim.

Exports were halted last month through the other export avenue - the northern pipeline from Kirkuk to Ceyhan, Turkey - after a May 25 bombing, Turkish officials said on condition of anonymity.

Two explosions on the southern pipeline occurred in the same area as a blast Tuesday. It could take up to a week to repair, Jassim said.

In another assault on the country's petroleum industry, Northern Oil Co. security chief Ghazi Talabani was killed in an ambush while going to work in the city of Kirkuk, said Gen. Anwar Amin of the Iraqi Civil Defense Corps. Three gunmen attacked Talabani's car after his bodyguard briefly left the vehicle in a crowded market. The bodyguard was wounded.

Talabani, the third Iraqi official to be killed since Saturday. was the cousin of the head of one of the two main Kurdish political parties, the Patriotic Union of Kurdistan.

Kirkuk sits on some of the world's largest oil reserves. The biggest northern oil field contains an estimated 7 billion barrels of recoverable crude, putting it in the same league as Prudhoe Bay, Alaska, during its heyday in the 1970s.

Saboteurs also blasted a northern oil pipeline about midnight Tuesday near the town of Dibis, some 20 miles west of Kirkuk, said Northern Oil official Mustafa Awad. The Dibis attack did not disrupt exports and the fire was extinguished, Iraqi oil officials said Wednesday.

Iraq's southern pipeline has been its main export artery ever since the U.S.-led invasion. Repeated sabotage attacks have forced Iraqis to curtail oil shipments in the north, and most of Iraq's crude exports now come from the south.

OPEC president Purnomo Yusgiantoro said Wednesday he would ask major oil producing countries who don't belong to the cartel - such as Mexico, Oman, Angola and Russia - to boost output to compensate for the loss of Iraqi exports. However, the director of Russia's Federal Energy Agency rejected the call, saying Russia did not have enough spare capacity, the Interfax news agency reported.

Although Iraq's reserves are huge, it is not a major player in global energy markets and a short-term interruption won't have a major effect. That could change if insurgents continue to interrupt Iraq's exports.

Pipeline sabotage, however, "has a large psychological effect on the markets and leads to higher prices," independent economist Jassem al-Saadoun told The Associated Press.

"The issue here is not that of supply and demand, but a political one that has to do with instability in the area, including what is happening in Saudi Arabia," he said, referring to the deadly attacks on foreign workers in the kingdom.

In a new sign of cooperation with the interim Iraqi government, al-Sadr told fighters who had come to the holy cities from other parts of Iraq to help fight the Americans to return home "to carry on their duties as God wants," a statement from his office said.

The firebrand preacher said last week he would work with the interim government if it takes steps to end the U.S. military presence.

Al-Sadr launched an uprising after occupation authorities closed his newspaper, arrested a key aide and announced a warrant for his arrest in the 2003 murder of a moderate cleric. Outraged loyalists rallied to his defense.

Although al-Sadr's forces still fight U.S. troops periodically in Baghdad's Sadr City district, the Americans forced the militia to abandon another Shiite city, Karbala, and to accept a truce this month in Najaf and Kufa. The truce has generally held.

Meanwhile, an Iraqi police officer was killed and five Iraqi civilians were wounded Wednesday when a roadside bomb exploded near U.S. convoy in Ramadi.

U.S. Marines arrested seven Iraqis, including six members of the Iraqi Civil Defense Force, for alleged involvement in the attack, military officials said. There were no U.S. causalities.

Civil defense troops are to assume greater responsibility for security after the formal end of the occupation, but concerns have risen in recent days about their lack of training and equipment.

Ahead of the power transfer, coalition officials said they would hand over the civilian part of Baghdad International Airport to Iraqi authorities about July 1. The military also plans to turn over the military side of the airport in August, a senior coalition official said on condition of anonymity.

Return of the airport was a key demand of the interim government, which is eager to take control of the country's borders when sovereignty is transferred.

Deputy Defense Secretary Paul Wolfowitz arrived Wednesday in Baghdad for talks on the sovereignty transfer, Al-Jazeera television reported.