Iraq to Export 40% More Oil Within 2011

It is one of the better problems a rebuilding country can have: Iraq is attracting too much oil investment.

The problem is that the infrastructure does not exist to export most of the extra oil produced. However, this is going to change as early as next year, perhaps increasing exports by one million barrels of oil per day, an increase of almost 40%. This will be a massive boost to Iraq, which gets around 95% of its revenue from oil.

In an interview with the Wall Street Journal, prime minister Nouri al-Maliki explained that the biggest hold up to exports is infrastructure. “That’s why we are about to construct a pipeline through Syria that pumps 2.6 million barrels per day. We also have the construction of four [floating] platforms for oil export.” The four platforms will export a total of 3.6 million bpd.

One of these platforms is due to become operational in September 2011, exporting 900,000 bpd. Add on the expected new Kurdistan exports of 150,000 bpd to 200,000 bpd and we’re looking at more than one million extra barrels, taking the total from 2.6m bpd today up to around 3.6m bpd. This will vastly overshoot the 2011 target of 2.25m bpd set earlier this year.

The cash generated will be used to finance further projects.

(Source: Wall Street Journal)

3 Responses to Iraq to Export 40% More Oil Within 2011

  1. […] Oil, which provides 95% of Iraq’s revenues, will see a massive leap towards the end of 2011, boosting exports by about 40%. […]

  2. Ahmed Mousa Jiyad December 31, 2010 at 6:22 am #

    Your mathematics of additional one million barrel per day (mbd) in Iraq oil export in 2011 needs revisions. Here is why,
    The most optimistic figures, which is naturally enough are given by the new Oil Minister Abdul Kareem Luaibi, “Iraq aimed to raise oil output to 3 million barrels per day by the end of 2011.” Since Iraq’s current production is 2.6 (according to the Minister) then, the increase at year-end is 0.4mbd. Even if one assumes that all this increase would be earmarked for export it would be for 2012 NOT 2011. In any case it is much far less than the one mbd suggested by you. Even if one assumes further that the 0.15 mbd from KRG (though there is still big doubt on this) is added the total increase in export would be still fraction of the 1mbd.

    The increase in oil production would come, mainly from the contracted 10% above the baseline production for Rumaila, Zubair and West Qurna 1 oilfields, assuming the IOCs manage to capture the natural decline and reverse the production upwards, an increase that faces many serious technical challenges so far, though they are manageable eventually.

    It is true that each single point mooring (SPM) buoy (floating platform) has the capacity of 0.9 mbd, and the first one is scheduled to be ready by September 2011, however, installed capacity is one thing and realized/utilized capacity is another, due to logistical and infrastructural constraints.

    Actually even the Iraqi State Oil Marketing Organization (SOMO) have set out ambitious plans for exports next year, with hiking its sales target by 9% to 2.53 mbd to reflect anticipated higher volumes from the country’s oil expansion.
    It appears that your 1mbd increase in Iraq’s oil export is a simple addition of 0.9 mbd (of the SPM) to the KRG 0.15mbd, suggesting 40% increase in oil export.
    The difference between SOMO’s 9% and yours 40% increase in Iraq’s export of oil puts much doubt on your estimate, thus revision is needed.

    Happy New Year.

    Ahmed Mousa Jiyad
    (Iraq Development Consultant)
    Norway.
    [email protected]
    31 Dec 2010

  3. Editor January 1, 2011 at 11:49 am #

    Dear Ahmed,

    many thanks for your comment and analysis.

    – Editor.

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  1. The Best is to Come in 2011 | Iraq Business News - December 29, 2010

    […] Oil, which provides 95% of Iraq’s revenues, will see a massive leap towards the end of 2011, boosting exports by about 40%. […]