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22 April 2024

Iraqi oil exports rose by 9.2%

By Agencies
Iraq's oil exports rose 9.2 per cent last year, the Oil Ministry announced on Thursday, largely because improved security allowed pumping to resume through a pipeline that links the northern oil fields to Turkey.

Total oil exports in 2007 reached nearly 600 million barrels, an average of 1.6 million per day. The oil was sold at prices ranging from $48 to $83 (Dh175.2 to Dh302.95) a barrel, ministry spokesman Assem Jihad said.

But there was an enormous difference in output between the southern port of Basra, which exported more than 550 million barrels, and the northern city of Kirkuk, which exported nearly 40 million barrels.

Since the 2003 U.S.-led invasion that removed Saddam Hussein from power, Iraqi production has usually hovered between 1.7 million and 2 million barrels per day, according to the International Energy Agency. Its prewar production was 2.58 million barrels per day.

In January 2006, output was 1.9 million barrels per day. It soared to 2.4 million in November and inched up to 2.475 daily barrels last month.

The increase came after Iraq managed to protect its northern oil export pipeline that links the Kirkuk oil fields with the Turkish Ceyhan export terminal. Sabotage left the pipeline idle most of the time from 2003 until the end of August 2007.

Early this month, the Iraqi Oil Ministry said it upgraded its oil facilities in 2007 with the help of nearly $560 million (Dh2.04 billion) in contracts with international companies.

In its annual statement, the ministry also said only 18.5 per cent of the money allocated by the national budget as capital investment in the oil and gas sector was spent between January and the end of October 2007. Insurgent attacks against oil facilities and employees complicated further investment.

Still, oil exports made up more than 90 percent of Iraq's revenues.
With the northern pipeline now protected, Iraq the holder of the world's third-largest crude oil reserves with an estimated 115 billion barrels aims to boost crude production to 3 million barrels per day by the end of this year.

In dire need of expertise from international oil companies to achieve this goal, Iraq decided this month to rely on a Saddam-era law until Parliament approves a new oil law to regulate the companies' work and share Iraq's oil resources among the country's Shiites, Sunni Arabs and Kurds.

The Oil Ministry extended until February 18 its first January 31 deadline for international oil firms to register to compete for tenders to help develop a number of oil and gas fields.

Iraqi officials are expected to resume talks Thursday with four international oil companies on technical support contracts for producing fields. The first round was launched late last year.

BP, Chevron, Exxon Mobil and Royal Dutch Shell submitted technical and financial proposals in December for five active fields and have already received counterproposals from the Iraqi side, an oil official said.

Under the proposed two-year contracts, the four companies are expected to submit detailed plans, including technical and financial offers which would then be unified under one model contract.

According to the Oil Ministry official, who spoke on condition of anonymity because he was not authorized to release such information, BP will submit a proposal for Rumaila, Chevron for West Qurna Stage 1, Exxon for Zubair, and Shell for Missan and Kirkuk.

The target is to increase output by 100,000 barrels per day at each of the five fields in the first year after signing the contract and sustain it over the second year.

Jihad, the Oil Ministry spokesman, added that the ministry had received its second oil tanker to help ease export problems Iraq has faced since 2003, and that delivery of the third one is expected soon.

The 13,000-ton capacity and Chinese-built Euphrates ship will join its twin, The Ship Dijla, which was inaugurated last month in Basra.

Iraq signed a $65 million (Dh237.25 million) contract with China last year to buy three oil tankers for the Basra-based Iraqi Oil Tanker Co. Iraq's fleet of oil tankers was battered by the 1980-88 Iran-Iraq war and then by the first Gulf War. (AP)