Tag Archive | "State Oil Marketing Organization"

Record Oil Production set to Increase

By John Lee.

Iraq produced a record of around 4 million barrels per day (bpd) of crude oil in December, Oil Minister Adel Abdel Mehdi (pictured) told a press conference on Sunday.

This beat the previous record for Iraqi production of 3.56 million bpd in 1979, according to an official from the State Oil Marketing Organization (SOMO).

The Minister went on to reveal plans to export 375,000 bpd for the first three months of 2015 from Kirkuk and the Kurdistan region, increasing to 600,000 bpd from April.

(Source: Reuters)

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Iraq Plans Record Oil Exports

By John Lee.

Reuters reports that the State Oil Marketing Organization (SOMO) is planning to export 3.3 million bpd of Basra crude from its southern ports in February.

December’s total figure hit 2.94 million bpd, the highest since 1980, of which a record 2.76 million bpd of oil was exported from the country’s southern terminals.

(Source: Reuters)

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Iraq Reviews Oil Prices

By John Lee.

Iraq’s State Oil Marketing Organisation (SOMO) has adjusted its official selling prices for its Basra Light and Kirkuk crude grades for February.

In common with some other countries, Iraq’s oil is priced relative to regional benchmark prices:

  • For shipments to US, contracts are priced are relative to the Argus Sour Crude Index (ASCI);
  • Shipments to Europe are priced relative to the North Sea Spot BFOE (Brent benchmark); and
  • Asian shipmentas are priced relative to the Dubai-Oman crude benchmark, published by Platts, the energy-information division of McGraw-Hill.

The new prices to Europe are as follows:

  • Basra Light to Europe will sell at a discount of $5.95 a barrel to Dated Brent, compared to a discount of $4.35 previously.
  • Kirkuk Crude to Europe will sell at a discount of $4.80 a barrel to Dated Brent, compared to a discount of $2.90 previously.

And to the US:

  • Basrah Light will sell at a discount of $1.05 to the U.S. benchmark, down 40 cents the previous month.
  • Kirkuk will sell at a premium of $1.75, unchanged from last month.

To Asia:

  • Basrah Light to Asia will sell at a discount of $3.70 to the benchmark, up from a discount of $4.00 last month.

(Source: Bloomberg)

(Oil image via Shutterstock)

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Hawrami Calls for Private Oil Exports

By Padraig O’Hannelly.

Dr Ashti Hawrami (pictured), the KRG’s Minister for Natural Resources, has clarified the two stage process involved in the recent agreement between Erbil and Baghdad regarding oil exports.

Speaking at CWC’s Kurdistan-Iraq Oil & Gas Conference recently in London, Dr Hawrami said that the first stage of the resolution covers the issues recently agreed, including the 2015 budget, the export of 250,000 bpd from KRG-controlled oilfields, and the facilitation of 300,000 bpd exports from the Kirkuk fields.

Still to be agreed as part of a second stage of negotiations over the next six months are issues including the KRG’s right to export oil independently, and to receive payments directly.

But he added that following the KRG’s recent experience with regard to the receipt of payments from Baghdad, which he described as “a wake-up call“, there will be no flexibility in the KRG’s position on these two points.

Dr Hawrami went on to express his confidence that a resolution will be found, and said that his preferred option would be for the oil companies to market their own oil, north and south, independently of either the KRG or the State Oil Marketing Organization (SOMO):

“The oil companies can do a better job in exploration, in production, and in marketing, and in everything else, so it is not our policy to [replicate the work of] SOMO.”

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December Crude Exports may Hit Record

By John Lee.

Reuters reports that Iraq’s oil exports may hit a record high in December.

Shipping data for the first 23 days of December suggest that exports from Iraq’s southern terminals have averaged at least 2.6 million barrels per day.

Additionally, the State Oil Marketing Organization (SOMO) has been exporting about 180,000 bpd of Kirkuk crude through the Turkish port of Ceyhan, following the deal reached between Baghdad and Erbil.

Taken together, this comes close to the 2.8 million bpd record high posted in February.

(Source: Reuters)

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China to Stop Increasing Iraq Oil Orders

By John Lee.

Chinese oil companies are to maintain their purchasing of crude oil from Iraq’s State Oil Marketing Organization (SOMO) at the 2014 level for next year, according to a report from Reuters.

The decision has been attributed to a slowing of demand growth in China, the varying quality of Iraq’s “Basra Light” crude, and Iraq’s failure to deliver the full contracted volumes in 2014.

This is the first time in almost a decade that volumes have not increased year-on-year.

Reuters data shows that China’s crude imports from Iraq rose in the first ten months of the year by nearly a quarter to 23.49 million tonnes — equivalent to 566,387 bpd — compared with the same period of 2014.

(Source: Reuters)

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SOMO Denies OPEC Price War

By John Lee.

The State Oil Marketing Organization (SOMO) has denied that it is waging a price war against other oil producers.

The company recently slashed price to its Asian customers due to what it described as “changes in the market” but has denied that this was an attempt to undercut other members of the Organization of the Petroleum Exporting Countries (OPEC).

(Source: NASDAQ.com)

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Bigger Discount for Heavy Basra Crude

By John Lee.

Iraq is reported to be giving bigger discounts for heavy crude from Basra from January.

The State Oil Marketing Organization (SOMO) recently abandoned plans to split its “Basra Light” grade into two grades, light and heavy.

Reuters says this latest move is aimed at pacifying buyers who have had to deal with varying quality of blended Basra Light, which can vary from an API gravity of 26 degrees to 34 degrees.

It is believed that from the end of the year, a discount, or “de-escalation factor”, of 60 cents a barrel will be applied for every API degree below 27; a de-escalation factor of 40 cents per API is already in place for Basra crude with an API below 34 degrees.

(Source: Reuters)

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