.
Part 2 of 2
The New York Times - Front Page Story on April 25, 2006
âRebuilding of Iraqi Pipeline as Disaster Waiting to Happenâ
By JAMES GLANZ
KBR ultimately settled on trying to put the pipelines under the Tigris using a technique called directional drilling, in which nearly horizontal holes are bored out in an arc through the riverbed. In a written response to questions, the company said it chose the technique because it was the only one that could be used to complete the project as quickly as the Army Corps had demanded.
Mr. Cox said he had not even been consulted. Gary Loew, another senior Corps official in Iraq at the time, remembers that the idea for drilling came from KBR and said that the Corps approved it verbally in the summer of 2003.
Mr. Cox, who was familiar with the technique from his own work in Texas, knew that with the heavy equipment and supplies needed for the job, his colleagues' claims that Fatah could be finished in 60 to 90 days were nonsense, particularly with the deteriorating security on the road from Kirkuk, where the supply planes would land.
"I said, 'Now how in the heck do you think you're going to do directional drilling with the situation we have here?' " Mr. Cox recalled, adding that he had told KBR officials, "It takes us forever to get enough security to drive down this road, and that's at 70 miles an hour."
That same month, a KBR pipeline expert saw a preliminary design and advised the company "that the project would probably fail," according to the inspector general report.
The most blatant warning came from the study that KBR had commissioned from Fugro South, a geotechnical firm.
The study stated repeatedly that the project should not begin without extensive field exploration and laboratory testing of the area.
KBR went ahead with the work without sharing the report with senior oil officials in Iraq. Nor did it carry out the testing that the report strongly recommended.
The report had cited "past tectonic activities near the site." The words, suggesting slippage of the earth's crust in eons past, would prove prophetic.
Troubles From the Start
The Fugro report did have one important consequence.
KBR included it in a "request for proposals" to drilling subcontractors â along with contradictory information from KBR suggesting that the ground was made of ordinary clays, silts and sandstones, the inspector general report found.
Faced with that contradictory information, the subcontractor that won the bid negotiated a contract that required it only to try drilling holes on a daily basis â not necessarily succeed. "There was no requirement that the subcontractor complete any holes," the inspector general wrote.
Ms. Norcross, the KBR spokeswoman, said that no subcontractor would have been "willing to mobilize equipment and personnel to an unstable war zone" if the contract had been written more stringently.
An official in the inspector general's office saw it differently. "It was a horrible contract," the official said. "It's basically, 'Give it your best shot, spend six months doing it.' "
In late January, 2004, drilling began. The plan called for boreholes to accommodate 15 pipelines, which would arc beneath the Tigris at shallow angles. Troubles turned up instantly.
Every time workers plied the riverbed with their drills, they found it was like sticking their fingers into a jar of marbles: each time they pulled the drills out, the boulders would either shift and erase the larger holes or snap off the bits.
The area had turned out to be a fault zone, where two great pieces of the earth's crust had shifted and torn the underground terrain into jagged boulders, voids, cobblestones and gravel. It was just the kind of "tectonic" shift that the Fugro report had warned of â hardly the smooth clays and sandstones that KBR had suggested the drillers would find.
The crew abandoned the first borehole and started a second, the inspector general reported. Twenty-six days later, the borehole went through. But the crews found it impossible to enlarge the hole enough for a 30-inch pipe to pass through. By the end of March, five months after arriving in Iraq, they managed to jam a 26-inch pipe through.
The crews would never again get anything larger than that across the riverbed. To make matters worse, the project suffered from constant equipment shortages, just as Mr. Cox, the Army Corps project manager, had predicted.
If KBR had declined to write performance clauses into the drill subcontract, the company had also included language that prevented the crews from speaking directly with the Army Corps, let alone passing along word that some of them knew that the effort was futile.
The company "restricted subcontractor communications by requiring all communications be addressed to them," the inspector general found.
Mr. Vogler, the senior Oil Ministry official, said he began hearing rumors from Iraqis in the ministry in Baghdad that something had gone terribly wrong, but the company itself seemed determined not to clarify what had happened. "We couldn't get a good status report," Mr. Vogler said. "We kept asking for it," he said. "We couldn't get one."
Still, a trickle of information found its way through the command structure of the Army Corps. Ms. Norcross of KBR said that in April 2004, the company notified a contracting officer in Baghdad that 75 percent of the $220 million allocated for the job order had been exhausted.
By then the insurgency had worsened, and the camp suffered regular attacks. The threat became so severe that drilling was temporarily suspended "while KBR and the Army Corps of Engineers worked to address the lack of adequate force protection," Ms. Norcross said.
After security concerns were addressed, the work at Al Fatah resumed and so did problems with the drilling. Troubling reports from KBR officials at the site eventually reached higher in the Army Corps, but there was little reaction.
J. Michael Stinson, an American who took over as senior oil adviser to the Oil Ministry in March, said not all of the blame for the project lies with the company.
"I don't know that the Corps covered itself with glory either," Mr. Stinson said. "The engineers, the managers, probably should have said: 'Time out. Let's send a bunch of people home. Let's find out if this is going to work.' "
'Culpable Negligence'
Finally, in early July 2004, some eight months after the project began, the Army Corps sent Mr. Sanders to Al Fatah.
A geologist with a Ph.D. from the University of Oklahoma and a former oilman, the blunt-spoken Mr. Sanders, now 68, said he joined the Army Corps when he grew bored with retirement.
One of the first documents he found at the site was the Fugro report, and it set off alarm bells.
"You just don't see a consultant's report like that that is totally dismissed," he said.
"That put them on notice," Mr. Sanders said. "When they didn't take that notice, they accepted what I would call culpable negligence."
KBR maintains that the report did not contain enough detailed information to raise questions about the project.
But Mr. Sanders said drill supervisors at the site, the kind of workers he liked to call "tool pushers," had indicated otherwise.
Hoping to start a conversation with them during his visit, Mr. Sanders said the geology around the area looked as if it could be tough on a drilling operation. The men did not hesitate.
"They agreed that it was just the wrong place for horizontal drilling," Mr. Sanders said. "They didn't see any probability of getting one of the big holes done."
But he said they had been told to keep drilling â pushing their tools, anyway. Of course, by giving Mr. Sanders any information, they had probably violated their contract with KBR.
Mr. Sanders, outraged by the poor quality of the work and what he described as the indifference of the Army Corps to it, contacted the inspector general. "Everything I could see out of it was being swept under the rug," he said.
But it was already too late. One morning at about the time of his visits, American officials in the Oil Ministry in Baghdad finally obtained a status report from KBR.
All the money had been spent.
Col. Emmett H. Du Bose Jr., who in December 2003 assumed command of the task force of the Corps in charge of the project, said other items in the $220 million job order, like putting emergency power generators at oil installations, did get done.
KBR provided him with optimistic assessments nearly to the end of the line, Colonel Du Bose said in a telephone interview, and he was convinced that the project would be a success. But he said that he was not sure who, if anyone, might have seen the contradictory information in the Fugro report.
"In hindsight, knowing what I know today, I would have probably said we need more geology information before we start drilling those holes," Colonel Du Bose said.
The new Al Fatah project is being carried out by a joint venture involving Parsons Corporation and the Australian company Worley, said Col. Richard B. Jenkins, commander of the Gulf Region Division-North for the Army Corps, in a telephone interview from Iraq.
The work relies on a less risky method in which the pipelines are laid down in a trench dug into the river bottom and encased in concrete. Colonel Jenkins said that Al Fatah was now "essentially a completed project."
But as of last week, an official at Iraq's State-owned North Oil Company said, oil was still not flowing at Al Fatah.
*****
Eric Schmitt contributed reporting from Washington for this article, and an Iraqi employee of The New York Times from Kirkuk, Iraq.
.