Iraq Exports Rebound Ahead of Expected September Drop

Source: Reuters 8/22/2013, Location: Middle East

Iraq's oil exports are unlikely to fall as much as expected when it proceeds with maintenance next month at its southern terminals, sources told Reuters, while shipping data showed supply has risen this month to compensate for the future drop.

Investors and European oil refiners are watching the level of Iraq's exports closely as supply disruptions in Libya and reduced flows from Russia have tightened markets, helping to support oil prices near $110 per barrel.

Iraq has sent mixed messages about the impact of September's work on loading facilities at the Basra terminal on supply. An official from Iraq's South Oil Co. said it would cut shipments by up to 500,000 barrels per day (bpd), while an oil ministry spokesman later said it would not affect exports.

An oil revival in Iraq after decades of sanctions and wars has slowed this year due to infrastructure and security problems. Unless momentum is regained in the autumn, Iraq is at risk of its first annual drop in output for three years.

"I think the oil ministry is under pressure to calm markets by rescheduling," said Samuel Ciszuk, oil analyst at the Swedish Energy Agency. "But I do not know if it is possible, and the effect will be further delays to Iraqi growth."

As such, buyers of Iraqi crude expect the work to go ahead and supply to drop, although they said it may not be as much as 500,000 bpd. Iraqi oil official who declined to be identified also said the reduction would not be as large as that, without giving an exact figure.

One major customer expected southern exports to average about 2.0 to 2.1 million bpd in September, up to 300,000 bpd lower than the rate seen so far in August.

The work in September is partly designed to increase export capacity. Shipments will be cut only during the first two weeks of the month while subsea piping is installed, affecting the loading berths, the Iraqi official said.

In August so far, Iraq's exports have risen by about 220,000 bpd versus July due to increased flows from southern terminals and after Iraq's State Oil Marketing Organization (SOMO) allocated extra oil to some customers, trading sources said.

Repeated bomb attacks on the pipeline to Turkey from Iraq's Kirkuk oilfields have continued to curb the flow in August at around 200,000 bpd - one eighth of its design capacity.

Exports from Iraq's southern ports have averaged 2.34 million bpd in August, according to shipping data, and supplies of Kirkuk from the north some 200,000 bpd, according to industry sources. Iraq said total exports were 2.32 million bpd in July.

"Production is picking up again and exports are running higher in August," the Iraqi oil official said. "There is likely to be a slight decline in September when we start to install the new metering equipment."

Shipments are expected to return to normal in the second half of September while further work on the new metering and manifold platform is carried out, he said. The final step is to weld a jacket - due to arrive from Saudi Arabia in November - on top of the new metering equipment, he said.

"The work is going ahead - it has to be done," the Iraqi official said. "We're doing our best to minimise the reduction of exports."

For more information about related Opportunities and Key Players visit Iraq Oil and Gas Projects

Qatar >>  8/10/2022 - McDermott International has been awarded a Front-End Engineering Design (FEED) contract by QatarEnergy for the North Field South (NFS) Offshore Pipeli...
Qatar >>  7/20/2022 - Milaha, the industry-leading provider of maritime and logistics solutions in Qatar, has announced a significant five-years contract award with an opti...

Related Categories: Coal  Electricity  General  Natural Gas  Oil 

Related Articles: Coal  Electricity  General  Natural Gas  Oil 

Gulf Oil and Gas
Copyright 2021 Universal Solutions All rights reserved. - Terms of Service - Privacy Policy.