• 3 minutes Nucelar Deal Is Dead? Iran Distances Itself Further From ND, Alarming Russia And France
  • 5 minutes Don Jr. Tweets name Ukraine Whistleblower, Eric Ciaramella. Worked for CIA during Obama Administration, Hold over to Trump National Security Counsel under Gen McCallister, more . . . .
  • 9 minutes Shale pioneer Chesepeak will file bankruptcy soon. FINALLY ! The consolidation begins
  • 12 minutes China's Blueprint For Global Power
  • 42 mins EU has already lost the Trump vs. EU Trade War
  • 6 hours Judge Orders Trump To Release Tax Returns
  • 9 hours Does .001 of Atmosphere Control Earth's Climate?!
  • 4 hours ''Err ... but Trump ...?'' #thedonkeystays
  • 8 hours China's Renewables Boom Hits the Wall
  • 8 hours Offshore SE Asia: Offshore OFS Could Get Major Boost in SE Asia
  • 1 hour Shale Gas News – November 9, 2019
  • 8 hours Saudi Aramco IPO Will Not Save Kingdom
  • 10 hours Atty General Barr likely subpeona so called whistleblower and "leaker" Eric Ciaramella
  • 6 hours The lies and follies of the "cry wolf" enviros: No more fire in the kitchen: Cities are banning natural gas in homes to save the planet
  • 5 hours CHK Trading @ 90 Cents
Alt Text

The Rig Count Collapse Is Far From Over

The US and Canadian Oil…

Alt Text

Harvesting Human Electricity Gains Commercial Traction

The harnessing of human energy…

Alt Text

Bullish Catalysts For Oil Aren’t Convincing Enough

Bullish Catalysts For Oil Aren’t…

Jen Alic

Jen Alic

 

More Info

Premium Content

Iraqi Oil Exports Slump But Optimism Abounds

On the verge of civil war and total collapse, Iraq’s oil exports are stagnating and the first half of this year has seen the Iraqis come up almost 30% short of planned exports of crude from Kirkuk—but never underestimate the power of massive oil reserves to withstand conflict.

For now, Iraq is producing 3.25 million barrels a day, compared with 2.9 million barrels at the same time last year, with Kirkuk exports slumping due to sabotage and politics. But a new supergiant field coming on line and other start-ups eyeing increased production paint a more optimistic picture in the near-term.

Next month could be worse due to construction work on the South Basra export terminal, but Baghdad is optimistic that the year’s end will see a major boost as the giant southern Majnoon oilfield is expected to come online.  

In July, Iraq reported total exports of 2.324 million barrels per day, down slightly from June, but expected to drop by 500,000 barrels next month due to work on a southern terminal handling Basra Light exports. The drop in exports will lead to a drop in production because the south has insufficient storage capacity.

Related article: Is There a Correlation Between the Level of Violence and the Output of Oil?

The South Basra terminal will undergo maintenance in September, which will affect work at the facility. While the International Energy Agency (IEA) has said the work would reduce Iraq’s oil exports by some 500,000 barrels per day for four to six months, Iraqi officials say the reduction will be significantly smaller and will not affect average export targets.

Kirkuk is a different problem. Unhappily located in territory disputed by Baghdad and the Kurdistan Regional Government (KRG) in the north, and seething from the sectarian fallout from the Syrian conflict, Kirkuk is a powder keg, and its pipeline infrastructure is a clear target.

From January to July, Iraq exported an average of 218,830 barrels a day of Kirkuk crude from the Turkish port of Ceyhan, according to Bloomberg and port agent Boutros Maritime & Transport SA. July has seen Kirkuk crude exports at a new five-year low of 190,000 bpd. This figure should be about 345,000 bpd.

Part of the problem is sabotage, and the Kirkuk pipeline to Ceyhan is a key target of attack. But part of the problem is politics: The KRG has suspended exports from the Kurdistan region through this pipeline depriving it of about 100,000 bpd.  Kurdistan is pursuing oil and gas independence from Baghdad, and is starting to export its own crude directly to Turkey, bypassing Baghdad’s pipelines.

Related article: Is East the New West in Energy Markets?

But this is nothing compared to what’s coming out of Basra, and this is the basis for Baghdad’s optimism. Though the country is on the verge of a civil war and experiencing some of the worst sectarian violence ever, investors never lose their confidence here, and the optimism hinges in part on the Majnoon oilfield.

Majnoon, in southern Iraq, is expected to boost exports by 400,000 bpd by the end of this year as Royal Dutch Shell brings the supergiant field online--probably in October. Majnoon holds 12.6 billion barrels of oil. First production is expected to start at 175,000 barrels a day.

Earlier, Baghdad had targeted 3.7 million bpd overall, which has been downgraded now to 3.4 million bpd or year-end 2013. Majnoon alone will not be enough to reach targets. Most notably, we have the supergiant, 17-billion-barrel Rumaila oilfield, operated by BP, which is expected to add 5 million barrels to its 1.4 million bpd of current production this year.

If this ramped up production becomes a reality, then Baghdad will be poised to exceed it targets, but be prepared for potential upsets amid a worsening security situation.

By. Jen Alic of Oilprice.com




Download The Free Oilprice App Today

Back to homepage



Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News
Download on the App Store Get it on Google Play