March 19, 2003 By Scott Miller SportsLine.com Senior Writer Tell Scott your opinion!

Camping Out with Miller TEMPE, Ariz. -- It's not like this is the first time in recent months that political unrest and trepidation have replaced strikeouts and the double play in the forefront of the mind.

With the glow of their first World Series championship still burning brightly, the Anaheim Angels parted ways for the winter with their newest star, hard-throwing reliever Francisco Rodriguez, knowing he was heading home to Venezuela, a country on the precipice of political upheaval.

The country experienced a coup last April, though President Hugo Chavez was restored to power just two days later. Then, the opposition to Chavez called a fourth national strike within a year's time in December, a strike that virtually paralyzed the state's oil industry for several weeks -- and, during which time, things turned violent.

"We had a pretty good idea -- in fact, before that stuff happened there, we had one guy who wanted to play (winter ball) there and we said no," Angels general manager Bill Stoneman said. "It was a North American guy. With travel advisories going out from the State Department, there were a lot of signs that there could be trouble down there.

"I just felt it wasn't a great spot for employees to be -- especially foreigners. But how can you tell a native he can't go home?"

The Angels -- and other clubs with Venezuelan players -- obviously decided they couldn't. And there were some harrowing times over the winter as the violence escalated. Houston outfielder Richard Hidalgo was shot during an attempted car-jacking of his SUV (he's in camp with the Astros now, recovered from surgery).

Rodriguez's grandmother, whom he calls his mother, and his uncle, whom he calls his brother, were mugged at gunpoint three times in one week.

"It was out of control," Rodriguez said. "It's something I don't like to talk about. Sometimes it was scary."

It could have been scary for the Angels, too. K-Rod, as he came to be known after bursting onto the scene like a meteor last postseason, is a vital part of the club's future. He is the closer-in-waiting behind Troy Percival, and anybody who caught a glimpse of him last fall knows why.

At 20 years and 286 days old, he became the youngest pitcher ever to win a World Series game, working three stellar innings in Game 2. He won a total of five postseason games against the Yankees, Minnesota and San Francisco last fall, fanning 28 batters in 18 2/3 innings.

This after he pitched a mere 5 2/3 innings during the regular season, all of which came last September. He struck out 13 hitters in that brief time.

"A lot of his success is, he's one who never lacks confidence," Angels pitching coach Bud Black said. "He's fearless when he pitches, when he plays, when he competes.

"Even though he's just 21, and even though he basically has just over a month of major-league experience, this guy is a believer in his ability. There's never a sense with him that he's in a place where he shouldn't be."

In the midst of the Venezuelan strike last winter, Rodriguez -- a national hero in his native land after his October exploits in the United States -- lived about 1 1/2 miles from the city center in Caracas, close enough that he could hear the protests. Even when he closed his windows, the tear gas would seep in.

The park close to his home where he would do his offseason running became too dangerous, so he purchased a stationary bicycle to ride at home.

He declined to elaborate on all of this the other day, other than his brief comments above.

Thanks to his fiancée in Phoenix, Andrea Harvey, the Angels were able to communicate with him regularly. Because of that, the Angels weren't overly concerned about their phenom despite the ongoing protests and violence in Venezuela -- the world's fourth-largest producer of oil.

"We kept tabs on him, almost all of which was through his fiancée," Stoneman said. "We'd send information on down, or it would come back, and it was through her."

Sometimes it was others in the Angels' front office who would talk to her, sometimes it was Stoneman. Mostly, it was because they couldn't establish cell phone contact with Rodriguez in Venezuela.

Nevertheless, thanks to Harvey, communication flowed effectively.

"For example, when we found out that the U.S. Embassy was going to open for a few days -- he didn't have his visa, but he had gotten approval -- when we found that out, we were able to get the information to him pretty quickly," Stoneman said. "Then we got confirmation back that he had gotten the information, and a couple of days later we got the information that he had gotten his visa.

"We felt more comfortable than maybe some other clubs did, because we were getting information."

Rodriguez reported to camp this spring none the worse for wear. The trouble at home doesn't appear to have affected his heart, and the success last October hasn't seemed to swell his head.

"He's been incredible," Anaheim manager Mike Scioscia said. "The pace of his practice, whether throwing bullpen or PFP drills (fundamental drills for pitchers), the pace of his practices has been incredible. But he's not the exception. He's the rule here."

Percival, the Angels' closer since 1996, has talked to Rodriguez some this spring, but the kid remains so young that Percival doesn't have a whole lot to discuss with him -- yet.

"It's kind of tough to give advice until you see a kid do more," Percival said. "You wait and let a kid experience success and experience failure on his own, and then you can talk. Like (former major league closer) Lee Smith did with me. Then you can learn."

Smith pitched in Anaheim in 1995 and 1996, passing the closer's torch to Percival in '96.

"When I'd go out, whether I'd get the job done right or wrong, he'd tell me what he thought I needed to work on," said Percival, who was 4-1 with a 1.92 ERA and 40 saves in 2002. "It's a (steep) learning curve when you need to pitch at this level. That's all stuff you find out through time."

It is stuff that Rodriguez, the neophyte who seems like he's been around for much longer than he actually has, continues to learn this spring. He's struck out 10 in nine innings of work this spring, holding opponents to a .167 batting average. He yielded his first home run Monday in Tucson, when the Chicago White Sox's Brian Daubach took him deep.

Still, even as a postseason hero in the U.S. last October and then a national hero back home in Venezuela, K-Rod is taking nothing for granted.

"Last year during the spring, I was just one more guy on the roster," he said. "It's very, very incredible. It's a 360-degree change, things changed so much after the World Series.

"My mom said what I did before in the postseason is in the past. Now, I have to stay focused, stay ready."

He is determined to do that.

"I want to prove who is Francisco Rodriguez," he said. "I want to show the Angels' office. I want to show the fans. I want to show my family and I want to show myself that this is what I can do. What I did in the postseason, I can do for a full season."

www.canada.com JAMES STEVENSON
Canadian Press Wednesday, March 19, 2003

CALGARY (CP) - With war being waged half way around the world, perhaps the first impact of the Iraq conflict for most North Americans will be when they pull into their neighbourhood gas stations.

Thursday's attack on Iraq by U.S. and British military forces could put potentially severe upward pressures on the global price of oil. And that directly affects the cost of gasoline, home heating fuel and other sources of energy. Many factors including the length and severity of the war - and whether Iraqi oilfields are destroyed - will dictate how high the price of oil will eventually rise.

In recent weeks traders pushhed crude prices to nearly $40 US a barrel, mirroring levels seen during the Gulf crisis of the early 1990s. But in recent days prices dropped to the low $30s and below amid speculation the war against Iraq will end quickly, with limited disruption to Persian Gulf oil shipments.

At the beginning of the last Gulf war, oil soared to more than $40 US a barrel. Given inflation, that would equate to about $50 US today.

Using the rough calculation that each $1 US rise in the price of crude increased Canadian gasoline prices at the pump by about one cent, $50 oil could send pump prices jumping by 10-13 cents in the short term.

But Vince Lauerman, a global energy strategist with the Canadian Energy Research Institute in Calgary, cautions that the price of oil might react differently during this war.

"It was a pretty soft market going into that last war, but now the market is extremely tight in terms of stocks," said Lauerman.

Tight global oil supplies will indeed be a major factor.

A recent report from the U.S. Energy Department report suggested American inventories were 16 per cent lower than a year ago and nearing a 28-year low.

And even though Iraq produces only about three per cent of world supply, it is now an open question as to whether the Organization of Petroleum Exporting Countries has enough spare capacity to make up for Iraqi production, let alone other potential disruptions from neighbouring states like Kuwait.

Though non-OPEC countries like Russia and Canada have been increasing their oil production yearly, Lauerman says they generally have no spare capacity and no way to turn on the taps harder at times of need.

Suncor Energy, one of the main producers in Canada's oilsands in northern Alberta, agrees.

"We are at production capacity at over 200,000 barrels per day," says spokeswoman Darlene Crowell recently. "We're not like a conventional oil producer who can ramp up more wells in a heightened environment."

Angus McPhail, an analyst at ING Financial Markets in Edinburgh, Scotland, says he believes markets would be awash in crude after a swift war, particularly if Venezuela continues to recover from an oil industry strike and other members of the Organization of Petroleum Exporting Countries keep breaking their output quotas. For the second half of the year, ING Financial Markets foresees an average Brent crude price of $18.50 US a barrel.

"We are adamant that oil prices will fall," McPhail said.

Chris Heggtveit, a federal Finance Department official, says there are too many variables that could come into play to determine the economic cost of the war and high oil prices.

Not only are complex Middle East geopolitical issues at play, but also other events such as Venezuela's ability to ramp up oil production again after months of internal strife that saw the world's third-largest producer at a standstill.

Still, Heggtveit says Canada should be in a better position than most countries to weather any economic storm.

"It's important to note that Canada's economy would be buffered against serious economic shocks by a number of factors."

Firstly, Canada's in a better financial position right now than any of the G-7 group of industrialized nations.

Also, because Canada is a net exporter of oil, there will be some offsetting benefits to very high oil prices. The oilpatch will revel in extremely high profits, but federal and provincial governments will also see an bump-up in royalty payments.

As well, Canada is a member of the International Energy Agency, which is a group of 25 countries formed during the energy crisis of the 1970s.

Net oil importing countries in the IEA are required to keep oil stocks of at least 90 days supply and the group has said publicly that it is poised and ready to put additional oil on the market to control price spikes in the event of an Iraq war.

The question really becomes, how long will a spike in oil prices last?

Craig Alexander, a senior economist with the Toronto Dominion Bank, says the price of oil will fall quickly if U.S. military might becomes apparent.

"The financial markets, if they start to see signs that we are getting a very quick military campaign, will immediately start to price in lower prices for crude oil," he said.

And while the political ramifications of war in Iraq will likely last a long time, oil markets will likely rebound a lot quicker.

"Iraq will remain in the headlines and news long after the military conflict is over," said Alexander. "But those developments are unlikely to be weighing on the price of crude."

"Once the risk of Iraq affecting its neighbour countries diminishes, and once we know for certain what happens to the Iraqi oilfields, at that point the market will begin looking beyond the conflict."

As such, the TD Bank is expecting Canada's economic growth to be a roaring four per cent in the second half of this year.

That forecast assumes that the price of oil will be declining substantially and the geopolitical situation becomes a lot more certain than it has been in the past several months.

By Peter Behr Washington Post Staff Writer Thursday, March 20, 2003; Page E01

The national average for a gallon of gasoline is over $1.70. In some areas, such as Malibu, Calif., prices are even higher. U.S. demand for gasoline has risen 2 percent a year in the past decade.

At the start of the first Persian Gulf oil crisis 30 years ago, America's hulking, chrome-laden cars covered about 15 miles on a gallon of gasoline. But few motorists gave that a second thought -- not with gasoline priced at 38 cents a gallon.

At the same time, American factories soaked up 43 percent of the nation's energy supplies and members of Congress debated how to address the power of the "seven sister" international oil companies that dominated worldwide production.

A generation later, as the fourth Gulf confrontation gets underway, the nation's oil needs and uses have changed, mirroring broad transitions in society and commerce.

Cars have slimmed down in a campaign to boost gasoline efficiency that succeeded in the 1980s but stalled in the 1990s. Persian Gulf kingdoms have supplanted the multinational oil companies as dominant producers. Today, oil companies cautiously manage exploration and inventories, a strategy that played a part in a surge in prices that has continued to the eve of U.S. military action in Iraq. From its peak of $40 a barrel last month, crude oil fell below $30 a barrel yesterday, closing under that level for the first time in three months, on expectations of a swift U.S. victory. Today, gasoline prices nationwide average more than $1.70 a gallon, a record for this time of year.

The transformation in oil dates to the 1970s, when prices quadrupled, forcing U.S. industries to change their manufacturing processes to reduce energy costs. Homes and appliances became more efficient, too, and the amount of energy needed to produce a dollar of gross domestic product dropped by 33 percent from 1973 to 1991.

Soaring pump prices and long gasoline lines in the late 1970s triggered a revolution in the auto industry as well, as consumers demanded cars that went farther on a tank of gasoline. Congress required that new vehicles get at least 27.5 miles per gallon, beginning in 1985. New cars' performance, led by imports, jumped from 20 miles per gallon at the end of the 1970s to 28 in the mid-1980s. Once that target had been reached, thought, it was not raised and the mileage performance of new cars stagnated.

An expanding and more affluent population, driving bigger cars, boosted gasoline demand 2 percent a year over the past decade.

But the restructuring of the oil industry has left the United States increasingly dependent on gasoline imports to satisfy motorists' needs, said Douglas MacIntyre, a senior oil analyst at the Energy Information Administration. U.S. refineries that manufacture gasoline are operating at or near capacity, he said, "and we aren't building new ones."

Until the 1970s, seven major oil companies held the coveted prime oil-production concessions in the Persian Gulf: Exxon, Mobil, Chevron, Texaco, Gulf, Royal Dutch Shell and British Petroleum. Now the seven sisters are four: Exxon Mobil, ChevronTexaco, Royal Dutch/Shell Group and BP.

In the view of Daniel Yergin, the author of "The Prize," the largest multinational companies have become bureaucratic corporations, balancing risks to maximize profits and compelled -- despite their size -- to compete for shareholder support and financiers' capital.

One consequence is the oil companies' unwillingness to get stuck with large inventories of high-priced crude oil or gasoline when pump prices start falling, MacIntyre said.

Paul B. Ting, a managing director of Salomon Smith Barney Inc., estimates that as a result of the wave of mergers in the industry in the past half-dozen years, the seven biggest U.S. oil producers and refiners have cut their crude oil inventories by 115 million barrels.

The U.S. economy stumbled after the Sept. 11, 2001, terrorist attacks, and early last year OPEC cut production and the Bush administration began buying oil for the nation's Strategic Petroleum Reserve. Oil prices began to rise, and U.S. producers let inventories drop.

The inventory numbers are a crucial benchmark of supply and demand for a legion of investors, speculators, and industrial and commercial buyers, who trade oil and oil products on commodity exchanges.

As stocks of crude oil and gasoline in the United States began to shrink last year, traders bid up the prices of oil and gasoline.

Growing concerns about a U.S. confrontation with Iraq began to inflate oil prices in September. A hurricane in the Gulf of Mexico hurt oil production in October, further reducing inventories, and a December strike at oil fields in Venezuela, a critical U.S. supplier, pushed oil prices over $40 a barrel this winter.

Changes in gasoline prices on commodity markets begin to show up at the pumps in as little as a week. The volatility of the system means that energy prices could rise, or fall, rapidly once the uncertainty of the Iraq conflict is resolved, said Adam E. Sieminski, a Deutsche Bank oil-industry analyst.

Three main fields are the key to Iraq's oil production, which contributed 5 percent of U.S. oil imports last year, Sieminski said. "If U.S. and British forces can secure them before anyone blows them up, that would be very good news."

That is the current bet among a majority of traders on commodity markets, analysts say -- one reason why oil prices have dropped recently.

Oil prices could sink to $25 barrel or lower if the U.S. campaign succeeds, said analyst Peter Beutel, president of Cameron Hanover Inc., in New Canaan, Conn.

Mark M. Zandi, the chief economist at Economy.com, said, "The markets are priced for a perfect war." If all goes well, the U.S. economy will turn upward. "Not roaring back, but back," he added. "If we get anything less than that, we have a problem. If prices don't fall quickly, I'd say we're in a recession in a month or two."

cbs.marketwatch.com By Myra P. Saefong, CBS.MarketWatch.com Last Update: 7:11 AM ET March 21, 2003

NEW YORK (CBS.MW) -- Brent crude futures sagged again in London trading Friday, as traders looked beyond fresh reports of oil wells set afire in southern Iraq and concentrated instead on the course of the military campaign against Saddam Hussein.

Brent for May delivery dropped back below the $25 level before recovering somewhat, trading lately at $25.20 a barrel, off 30 cents, on London's International Petroleum Exchange. Brent crude closed down $1.25 a barrel on Thursday.

Meanwhile, spot gold gave up early gains, skidding 10 cents to $332.30 an ounce. On Thursday, gold futures closed at a three-month low. See Metals Stocks.

Brent's price weakness points to a further retreat in the benchmark crude contract when trading opens later on the New York Mercantile Exchange.

Expectations that the U.S. and allied war against Iraq will be quick with little disruption eventually won the favor of most oil traders on Thursday, prompting crude futures to fall for a sixth-straight session back to mid-December levels.

"The feeling is apparently very widespread that the conflict will be resolved quickly and oil will flow freely into the marketplace," Michael Fitzpatrick, an analyst at Fimat USA, told clients Thursday.

During the session, developments in the war took crude prices on a roller coaster ride, with nearly $3 separating the price from its low and its peak.

As many as four oil fires are burning in southern Iraq, U.S. defense officials said Wednesday.

During a press conference, White House spokesman Ari Fleischer said allied forced were confirming the fires at a "small number" of wells, but had no information as to the extent of the damage. See Special Report: America at War.

The news provided oil with a temporary lift, but that soon faded when the number of oil fires was actually smaller than many had anticipated.

"This is really a good sign," said energy analyst Peter Zeihan of Stratfor, an intelligence-consulting group based in Austin, Texas, explaining that the oil market was expecting many more wells to be set on fire, even at the start. Listen to Zeihan's outlook.

He now believes that the wells mentioned in the news are part of the Rumaila oil fields, Iraq's second-largest producing field geographically behind Kirkuk in the north. Rumaila accounts for about half of Iraq's production of around 2.4 million to 2.5 million barrels per day.

There were reports that several hundred of the more than 500 wells in Rumaila were wired together with explosives by the Iraqis and that there was a single switch that would trigger a fire in all of them, he explained.

The news that only a few wells were set on fire indicates that there is no single switch, he said.

In Thursday's Nymex action, April crude closed at $28.61 a barrel, down $1.27, to sit at its lowest close since Dec. 13, 2002. The contract, on the decline since March 13, has lost $9.22 in the last six sessions -- nearly a 25 percent pullback.

Crude for May delivery, which became the front-month contract at the close of the session, fell by $1.24 to $28.12 a barrel.

"The removal of uncertainty has led to a reduction in the [oil] risk premium by as much as one half" -- but not a single shot needed to be fired for this to happen, said Thorsten Fischer, an oil economist at Economy.com.

"It was enough that the market was convinced that the waiting was going to be over soon," he said. "That is why the actual start of the campaign did not make that big of a difference."

Oil prices have dropped dramatically since the U.S. made its decision to forcibly disarm Iraq, with investors expecting the war "to go well for the U.S., Iraqi oil fields to be preserved and a safer, friendlier oil trade to emerge as a result," said Todd Hultman, president of Dailyfutures.com.

Most oil traders are "acting as if the outcome of the war is in the bag, but clearly it is not -- at least not yet," he said.

What next

Right now, the biggest concern for oil traders will be the condition of the oil fields in Iraq and Kuwait and the flow of oil tankers in the Persian Gulf," said Hultman.

Economy.com's Fischer emphasized that "everything depends on how the campaign proceeds."

Crude prices will continue to fall as long as the war goes according to plan -- "as long as there is no bad news" which could come in the form of an escalation of the conflict either because Saddam attacks Israel or uses biological and chemical weapons, he said.

The war situation would also worsen if Saddam succeeded in destroying oil fields in neighboring countries, Fischer said. "Any of these developments would cause crude prices to reverse course, but most likely only temporarily," he said.

If things went terribly wrong and prices shot up again, the Bush administration would release crude from the Strategic Petroleum Reserve, "dampening further price hikes," he said.

Michael Lynch, president of Strategic Energy & Economic Research (SEER) in Winchester, Mass., pointed out that a release from the Strategic Petroleum Reserve can be "considered 'in the pipeline' right away" because the markets know the details of the amounts, location and delivery of the oil.

Supplies reassured

For now, oil traders need "deep pockets to survive, because there are going to be sharp swings up and down in the next week or two," said SEER's Lynch. "Any given position could be hammered," he said, so "expect margin calls."

There's no sure way of making money, but traders "may try to benefit from the increased volatility, while more conservative people may just want to hedge the price of energy they'll have to pay for their business," Fischer said.

With concerns over supplies growing, OPEC and the International Energy Agency reassured the oil market that producers are committed to maintain oil supplies in the event of war-related disruptions.

In a statement from Paris, Claude Mandil, the IEA's executive director, said: "With the initiation of military operations in Iraq we are monitoring developments as they relate to the supply of oil to world markets ... We are determined to promote stability in world oil markets and remain ready to reinforce producers' efforts should the need arise."

OPEC said on Thursday it would make up for any oil shortages from the attack on Iraq, using spare output capacity to ensure continued supply, Reuters reported.

OPEC President Abdullah al-Attiyah of Qatar said he had spoken with all 11 members of the oil cartel following the attack.

Against this backdrop, the Energy Department and American Petroleum Institute both reported Wednesday a rise in crude inventories and a drop in gasoline supplies, but data for distillates were mixed.

Crude inventories, as of the week ended March 14, stand nearly 18 percent below the year-ago level, and distillate and gasoline stocks are 23.5 percent or 7 percent below their year-ago levels, respectively, according to the two reports. See the full story.

Retail gasoline prices slip

Prices for gas at the pump were slightly lower for a second-straight day on average for the nation Thursday, according to AAA's Daily Fuel Gauge Report.

The average price at the pump totaled $1.714 a gallon as of early Thursday, compared with $1.719 on Wednesday. A year ago, prices stood at $1.298 a gallon. The price touched a fresh all-time high Tuesday at $1.722.

Retail prices in California were the highest in the nation, averaging $2.176 a gallon, unchanged from the day before, the AAA's report said.

"Gasoline prices may well reach new record highs if stronger demand coincides with still high prices," said Economy.com's Fischer. They will certainly reach record highs if one of the more pessimistic scenarios plays out in the Gulf and crude prices rise again," he said.

Futures prices appeared to be unfazed by an unconfirmed report that terrorists are mulling an attack on key U.S. refineries in the Caribbean.

The Oil Price Information Service, a provider of gasoline commentary, said the U.S. believes terrorists could be planning an attack on a 495,000 barrel-per-day refinery in the Virgin Islands operated by Amerada Hess (AHC: news, chart, profile) and a 250,000 barrel-per-day facility in Aruba run by El Paso (EP: news, chart, profile).

The report is an exclusive to OPIS and its newsletter Oil Express. A call to Amerada Hess seeking comment wasn't returned. An El Paso spokesperson said "all of our facilities are operating at a high state of alert. We employ a multitude of security measures and [are] continually updating and enhancing them and do not discuss specific security measures."

In the futures market, April gasoline prices closed at 90.96 cents a gallon, down 3.29 cents on the session.

Also on Nymex, April heating oil fell by 1.17 cents to 82.44 cents a gallon.

"Refined products will follow crude prices, but strong seasonal demand for gasoline will support gasoline, whereas demand for distillates will continue to fall," said Fischer.

Natural gas climbs

April natural gas climbed by 2.8 cents to close at $5.306 per million British thermal units after a weekly update on U.S. supplies revealed a decline within market expectations.

The Energy Department said natural-gas inventories fell by 85 billion cubic feet during the week ended March 14.

Total inventories of 636 billion cubic feet are now 1 trillion cubic feet less than the level of a year ago and 646 billion cubic feet below the five-year average.

Total stocks are at "a new all-time spring low," said IFR Pegasus senior analyst Tim Evans. But "mixed weather and fickle petroleum may continue to hamper uptrend development."

Fimat expected U.S. gas in storage to have been drawn down by 88 billion cubic feet last week.

In the equities arena on Thursday, the Philadelphia Oil Service Index ($OSX: news, chart, profile) traded higher. See Energy Stocks.

And the Reuters/CRB Index -- a broad-based measure of the commodity futures market -- closed at 234.2, down 0.4 percent amid weakness in gold and energy futures markets.

Myra P. Saefong is a reporter for CBS.MarketWatch.com in San Francisco.

www.thestar.com Mar. 19, 2003. 08:12 PM

LONDON (AP) - Iraqi troops needed just a few days and some plastic explosive to destroy more than 700 wellheads and turn Kuwait's oil fields into a desert inferno. Fears are growing that President Saddam Hussein might have organized a much more meticulous sabotage of Iraq's own oil fields, in a scorched-earth tactic that could cripple Iraqi production.

The oil industry has buzzed with rumours in recent weeks that Iraqis are rigging their wells with explosives in the hope of slowing a U.S.-led attack and making the country's oil wealth worthless for any new government. A loss of oil from Iraq - home to the world's second-largest oil reserves - could crimp supplies for importing countries, including the United States, which depends on Iraq for two percent of all the crude it consumes.

Oil exports are also a major source of the money that would be needed to pay for Iraq's reconstruction after a war. Due to their strategic importance, the U.S. Defence Department said it would try to secure Iraq's oil fields quickly to prevent forces loyal to the Iraqi president from damaging them.

"We can confirm reports that (Saddam) has taken measures to booby trap oil wells by wiring the wells so that one person can blow them up," said Defence Department spokeswoman Megan Fox.

"If the worst happens and he does detonate something that causes the oil wells to catch fire, we'll do everything we can. Those assets belong to the Iraqi people, and as much as possible we'd like to keep them intact," she said.

Conventional explosives attached to wellheads and other vital facilities could halt production at any of Iraq's 1,685 wells. With more than twice as many oil wells as Kuwait, Iraq could suffer an even greater economic and environmental disaster.

When Iraqi troops retreated from Kuwait in February 1991, they attached plastic explosives to wellheads - clusters of pipes and valves protruding from underground wells - and piled sandbags against them to direct the force of the explosions for maximum effect.

The result was Dante-esque geysers of burning crude at 603 wells and serious damage at more than 100 others. Teams of firefighters from the United States, Canada and eight other countries worked from April until November of that year to douse the last flames.

Most of the teams used seawater pumped through Kuwait's empty oil pipelines to battle the fires. The heat was so intense, at more 1,093 degrees C, that water sometimes continued bubbling on the ground for two days afterward, said Canadian Mark Badick of Safety Boss, Inc.

"We've had fire helmets melt on our heads," said Badick, whose Calgary-based firm put out 180 of the Kuwaiti well fires.

Firefighters from Hungary had a different technique, using two jet engines mounted horizontally on a tank chassis - a homemade vehicle they called Big Wind - to blast flame-retardant foam.

It took Kuwait more than two years and $50 billion to restore its oil output to pre-Persian Gulf War levels. Iraq, if it sabotaged its oil fields, could take longer and cost much more.

Iraq's fields and pipelines are badly run-down after 12 years of UN economic sanctions. Its fields are also much farther from the ocean than those in Kuwait, so firefighters might be unable to pump seawater to tackle burning wells there.

Destruction could be especially bad if Iraqis set off explosives underground, deep within the well shafts themselves. If that happened, firefighters would have to drill a new "relief well" and pump a mixture of sand, gel and mud into each damaged shaft to try to plug it up and stop the blowout.

"It's a long, arduous process," Badick said. Whereas he and his crews put out as many as five fires a day in Kuwait, cleaning up after a single underground explosion can take two months.

Manouchehr Takin, an analyst at the Center for Global Energy Studies, said he doubts that Saddam would go so far as to place explosives 100 metres into well shafts.

"I'm not sure there are enough engineers and rig operators in Iraq to do this kind of work," he said.

Even if the Iraqis did booby-trap their oil fields, Takin argued Saudi Arabia, Venezuela and other OPEC member countries could ramp up their production to offset Iraq's two million barrels a day in exports.

Saudi Arabia, which has the world's largest crude reserves, has indicated repeatedly it would boost its output to keep supplies flowing. Also, the United States and other oil importing countries could tap into their four billion barrels in strategic petroleum reserves, if necessary, to cover a shortfall.

Brown & Root Services of Houston has drawn up a plan for the U.S. Defence Department for containing and assessing any damage to Iraqi oil installations. The Pentagon has invited companies to express interest in this possible work but has yet to award any contracts.

The challenge for such companies would multiply if Iraq used chemical, biological or radioactive material to sabotage its oil fields.

"That's a whole new ball game," said Peter Gignoux, head of the oil desk at Salomon Smith Barney.

Such a nightmare scenario gives pause even to well-fire veterans like Badick.

Special suits designed to protect a wearer against biological or chemical agents would disintegrate in the heat of a burning well. Firefighters might have no choice but to wait until the fires burn themselves out.

Perhaps the worst challenge would be sabotage from a radioactive "dirty bomb," Badick said.

"Would you go working around Chernobyl?" he asked, recalling the 1986 nuclear accident in Ukraine.