The Bush administration has come under fire for paying Iraqi newspapers to publish ‘’good news'’ stories. Headlines Monday of a surge in Iraqi oil revenues this year seem to be the kind of news Washington would love to see - and it didn’t cost a dollar or even a dinar.

But, as ever with Iraq, just as the oil bubbles slightly below the surface, so does the truth. It’s a fact that oil revenues are expected to reach $23 billion this year, compared with $17.5 billion a year ago. ‘’The budgetary position in 2005 has improved substantially,'’ the report said.

The trouble is that while Iraq is joyous about at 31.4% rise in revenue, global oil prices are rising this year at a rate of 36.5%. That’s a substantial difference in what Iraq should be earning if the oil industry was approaching anything close to normal. As Dow Jones Newswires reports:

‘’The report, called ‘’Iraq, as a Democracy: Progress and Challenges,'’ didn’t refer to losses incurred by the Iraqi oil sector due to sabotage of Iraq’s oil infrastructure.'’

According to the oil ministry, Iraq has lost around $11.35 billion in damages to oil facilities, cost of repairs, and lost export revenues in the time since exports resumed after the war and the end of May 2005. The report, from the prime minister’s office claims Iraq’s oil output is near pre-war levels at 2.3 million barrels a day, but oil officials and analysts put it near 2 million b/d. Exports are claimed to be 1.7 million b/d, but are reported by oil officials at only 1.4 million b/d.

Iraq has been consistently missing oil output and export targets, despite optimistic projections. The tone for such optimism was set by U.S. Vice President Dick Cheney, who famously told a journalism convention in April 2003 - just weeks after the start of the war - that he expected Iraq to be pumping “back up on the order of two-a-half, three million barrels a day within - hopefully by the end of year.'’

Elsewhere, a top Iraqi official took exception to U.S. claims about the potency of Iraq’s security forces.
A further report contends there has been a 70% decline in insurgent attacks.

Bottom line, with oil as with security, which go hand in hand: Iraq ‘’has a long way to go.'’