BAGHDAD, July 29: Iraq’s oil output is now surpassing one million barrels per day (bpd), with increased oil sales helping fund the reconstruction effort here, the US-led coalition said on Tuesday.

“Crude oil production is rising very fast now. We are up to well over a million barrels a day,” a coalition spokesman told reporters here.

“Yesterday’s production was significantly above that figure,” he added. “That’s going to put a lot of money into the budget for reconstruction of this country, which is our aim.”

The previous official figure provided earlier in the month by the oil ministry was 800,000 to 900,000 bpd.

A key development in the industry, the spokesman added, was the conclusion of a deal between Iraq and Syria to resume rail links.

The first train from Syria, expected to arrive in Baghdad late Thursday, will bring empty oil tankers back into Iraq from Syria, where they had been held since the start of the US-led war in March, the spokesman said.

The train service would boost by about a third Iraq’s ability to move its crude to oil refineries in the region.

Iraq’s Southern Oil Co (SOC) said Monday the southern oil fields have an average output of 500,000 bpd, which could increase to 800,000 bpd, if security and electricity supply allowed.

“Last week, we achieved one million plus, but we have problems with the supply of electricity: there are frequents cuts,” SOC director Jabbar Ali Hussein told AFP.

Sabotage and looting have plagued the oil sector, with pipelines suffering crippling damage, while just 150 of 700 oil wells are in working order, Hussein said in Iraq’s second city Basra.

Oil is crucial to the US-led coalition’s plans to rebuild Iraq. The coalition is banking on sales of 3.4 billion dollars this year, which would supply half the six-billion-dollar state budget it announced earlier in the month.—AFP