‘Iraq’s oil exports will remain steady in 2016’

barrel professor of death flickrA collapse in global prices, which at US$47 a barrel are less than half their level of two years ago, has hit revenue for the government which relies on oil for nearly all its income. (Image source: Professor of Death/Flickr)Oil exports from Iraq’s southern ports have averaged 3.162mn bpd in June 2016, down slightly from May due to maintenance work and rising demand for fuel oil used in power generation, according to state-owned South Oil Company (SOC) official

The exports, including 850,000 barrels of Basra Heavy, are expected to hold steady through the end of the year, Hayan Abdulghani Abdulzahra, head of SOC, told Reuters.

“With the start of summer, demand for crude oil from power stations and refineries has increased to around 550,000 bpd and this comes at the expense of exports,” he said. Power stations and refineries had been using 400,000 bpd before high temperatures boosted electricity consumption, he said.

OPEC’s second-largest producer aims to increase its southern oil storage capacity to 14mn bpd by Q1 2018, from 11.5mn currently, to help cope with export bottlenecks caused by bad weather and to absorb an expected rise in output, Abdulzahra said.

The country also plans to bring a fourth single point mooring (SPM) facility online by mid-2017 to boost export capacity from southern terminals to 4.5mn bpd from 3.6mn currently, he said.

Iraq, last year, was OPEC’s fastest source of supply growth, boosting output by more than 500,000 bpd, despite spending cuts and conflict with Islamic State militants, media reports suggested.

A collapse in global prices, which at US$47 a barrel are less than half their level of two years ago, has hit revenue for the government which relies on oil for nearly all its income.

Abdulzahra added that more talks were needed with ExxonMobil and PetroChina, which Iraq approached last year about a multi-billion dollar project to boost output from Nahr Bin Umar and Artawi, two smaller southern oilfields now producing 35,000 and 17,000 bpd respectively.

“We reached an initial agreement that production from both fields should reach 550,000 barrels per day,” he said, without specifying a timeframe.

SOC is seeking investments from the two companies to build infrastructure needed to raise output at fields it operates.

Production from BP’s Rumaila oilfield, country’s largest, is currently at 1.45mn bpd, more than 60,000 barrels higher than last year.

West Qurna 1, developed by ExxonMobil, is producing 450,000 bpd, while Lukoil’s West Qurna 2 produces 405,000 bpd, he said. Output from Shell’s Majnoon is at 220,000 bpd and at Eni’s MIZubair at 360,000 barrels.

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