al clarity is essential
to attract investment.

--The U.S. government should encourage the Iraqi government to
accelerate contracting for the comprehensive well work-overs in the
southern fields needed to increase production, but the United States
should no longer fund such infrastructure projects.

--The U.S. military should work with the Iraqi military and with
private security forces to protect oil infrastructure and contractors.
Protective measures could include a program to improve pipeline
security by paying local tribes solely on the basis of throughput
(rather than fixed amounts).

--Metering should be implemented at both ends of the supply line. This
step would immediately improve accountability in the oil sector.

--In conjunction with the International Monetary Fund, the U.S.
government should press Iraq to continue reducing subsidies in the
energy sector, instead of providing grant assistance. Until Iraqis pay
market prices for oil products, drastic fuel shortages will remain.

Long Term

Expanding oil production in Iraq over the long term will require
creating corporate structures, establishing management systems, and
installing competent managers to plan and oversee an ambitious list of
major oil-field investment projects.

To improve oil-sector performance, the Study Group puts forward the
following recommendations.

RECOMMENDATION 63:

--The United States should encourage investment in Iraq's oil sector
by the international community and by international energy companies.

--The United States should assist Iraqi leaders to reorganize the
national oil industry as a commercial enterprise, in order to enhance
efficiency, transparency, and accountability.

--To combat corruption, the U.S. government should urge the Iraqi
government to post all oil contracts, volumes, and prices on the Web
so that Iraqis and outside observers can track exports and export
revenues.

--The United States should support the World Bank's efforts to ensure
that best practices are used in contracting. This support involves
providing Iraqi officials with contracting templates and training them
in contracting, auditing, and reviewing audits.

--The United States should provide technical assistance to the
Ministry of Oil for enhancing maintenance, improving the payments
process, managing cash flows, contracting and auditing, and updating
professional training programs for management and technical personnel.

6.