Iraq Oil Exports Stagnate Due To Port Work

Iraq’s oil exports are stagnating compared with numbers from this time last year, and are set to fall sharply next month. This plateau in exports comes as major work is carried out in the vital southern export terminals, Reuters sources explained.

Infrastructure and security problems are at the heart of Iraq’s struggle to keep pace with last year’s rates, although Baghdad is confident of a big rise in production by the end of the year once the giant southern Majnoon oilfield begins producing.

Iraq’s overall exports of 2.324 million barrels per day (bpd) in July were down a small fraction on June, Iraq’s oil ministry spokesman Asim Jihad said on Wednesday. Southern Basra Light exports are expected to drop by 500,000 bpd in September while metering equipment is installed at the terminal.

Reuters is also reporting that Iraq’s major customers say state oil marketer SOMO is suggesting cuts next month of 25 percent in liftings of the main Basra Light grade, which have been running at around 2.1 mln bpd. Due to a lack of storage capacity in the south, the export cut will force a decrease in production on nearly the same scale.

Output of crude oil in 2013 has averaged 2.9 million bpd, which is even with last year output, although flows climbed to 3.25 million bpd at the start of August.

“We expect output to rise by 400,000 bpd by the end of this year due to the start up of the Royal Dutch Shell-operated Majnoon oilfield in southern Iraq and other smaller sources,” Jihad said.

The government has set a production target of 3.4 million bpd for end-2013, down from an initial 3.7 million bpd. If the Majnoon and other increases are realised, Iraq will exceed the reduced target rate by the end of the year.

“Production from the Majnoon oilfield should start in October,” Jihad said while the oil minister had previously said that July would the start date.

To continue its production increases, Iraq will need to start up other southern fields apart from Majnoon, such as West Qurna-2, run by Russia’s Lukoil. Garraf, also in the south, and Badra – farther north – will also contribute.

(Source: Reuters)

 

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