March 2012 saw record high oil exports and profits for Iraq. That was due to several factors including better weather, the work of foreign energy corporations, and the opening of a new terminal. Continued tension in the Persian Gulf over Iran also kept prices high, meaning that Iraq was able to bring in a huge amount of profits last month as well.
The increase in exports in March 2012 was due to higher output from both the north and south. In February, Iraq exported an average of 2.01 million barrels a day, which was a fourteen-month low. In comparison, last month saw 2.317 million barrels a day. Oil Minister Abdul Karim Luaibi declared that the highest mark since the 2003 invasion. Both the port of Basra and the northern pipeline saw a rise in output. The south went from an average of 1.711 million barrels a day in February to 1.917 million in March, while the north grew from 375,000 barrels to 400,645. For the past few years, Iraq’s oil production has been going up, but the amount of exports has been severely limited by the lack of infrastructure. That problem is finally being dealt with.
Comparison Of Exports From The Port Of Basra And The Northern Pipeline March – February 2012
March 2012
Basra 1.917 mil/bar/day
North 400,645 bar/day
Feb. 2012
Basra avg. 1.711 mil/bar/day
North 375,000 bar/day
Iraq Oil Exports And Profits 2011-2012
Month
|
Avg.
Exports
(Mil/
Bar/
Day)
|
Avg. Price Per Barrel
|
Revenue (Mil)
|
Jan. 11
|
2.16
|
$90.78
|
$6.082
|
Feb.
|
2.20
|
$98.44
|
$6+
|
Mar.
|
2.15
|
$107.13
|
$7.167
|
Apr.
|
2.14
|
$114.26
|
$7.342
|
May
|
2.22
|
$108
|
$7.45
|
Jun.
|
2.27
|
$105.16
|
$7.173
|
Jul.
|
2.16
|
$108.80
|
$7.3
|
Aug.
|
2.19
|
$104.92
|
$7.124
|
Sep.
|
2.10
|
$104.89
|
$6.619
|
Oct.
|
2.08
|
$104.43
|
$6.742
|
Nov.
|
2.13
|
$106.59
|
$6.833
|
Dec.
|
2.14
|
$106.18
|
$7.061
|
2011
|
2.16
|
$104.96
|
$6.907
|
Jan. 12
|
2.10
|
$109.08
|
$7.123
|
Feb.
|
2.01
|
$112.92
|
$6.595
|
Mar.
|
2.31
|
$118
|
$8.475
|
The rise in foreign sales was due to several factors. First, bad weather and technical problems were blamed for February’s low numbers. In the port of Basra for example, high winds lead to choppy waters, which prevent ships from docking. That was not an issue last month. Second, foreign corporations continue their work within Iraq to boost overall production. Italy’s Eni for instance, announced in late March that it had increased output at the Zubayr field in Basra from 150,000 barrels a day to 270,000 barrels. Last, and most importantly, a new single point-mooring terminal started operating in Basra at the beginning of the month. It has a capacity of 850,000 barrels a day, and will boost exports by around 300,000 barrels a day. The first tanker started loading at the new port on March 8, and left five days later. By March 27, a third ship was done filling up as well. The new mooring is part of a $1.3 billion expansion plan by Iraq’s Oil Ministry, which will include three more terminals built by Australia’s Leighton Holdings. The second is due to open in April, but delays can be expected just like happened with the first one, and just about every other major project in the country. When all four are up and running they will add 3.4 million barrels a day in capacity to Basra. This is by far the most important event. Weather is an uncontrollable factor, and foreign companies have been working in Iraq since 2009. Often, they have had to cut back their work, because Iraq’s infrastructure cannot handle the added production. What have been needed are new pipelines and export ports, and that’s being addressed now.
Iraq not only benefited from increased exports in March, but also high prices. Iraqi crude increased from $112.92 per barrel in February to $118 last month. That led to record profits at $8.475 billion. That was far above the previous high of $7.45 billion seen in May 2011. Prices have stayed at over $100 per Iraqi barrel for exactly one year now. That was started by the Arab Spring, and has continued with the tensions over Iran. That means that Iraq’s new infrastructure is coming on line just in time to catch this wave of increased speculation on international markets, which will lead to higher revenue for a country that is the most oil dependent in the Middle East and North Africa.
Iraq has been waiting literally decades to improve its infrastructure and achieve its promise with regards to its oil industry. Sanctions, wars, and the U.S. invasion have consistently set back these plans. With violence finally down in the country, and foreign companies having signed contracts with the central government three years ago, Iraq can finally begin to reach its potential with regards to its most important natural resource. That process will still take a long time, and there will be setbacks along the way, but the country is coming into its own as a major player on the world energy market once again.
SOURCES
Ajrash, Kadhim and Razzouk, Nayla, “Iraq March Crude Exports Rise to Highest Since 1980,” Bloomberg, 4/1/12
Dow Jones, “New Iraq Oil Export Terminal Loads 3rd Vessel –Official,” 3/27/12
Kami, Aseel, “UPDATE 2-Iraq denies technical fault in new oil terminal,” Reuters, 3/22/12
Mohammed, Aref, “CORRECTED-UPDATE 1-Iraq starts oil exports from new floating facility,” Reuters, 3/8/12
Rasheed, Ahmed, “Iraq approves Hormuz oil exports contingency plan,” Reuters, 3/18/12
Reuters, “First tanker leaves new Iraq export terminal,” 3/13/12
Al-Saleh, Ammar, “Eni oil company in Basra reaches 270,000 barrels per day,” AK News, 3/29/12
Al-Wannan, Jaafar, “New Basra oil port begins operation,” AK News, 3/6/12
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