July 2013 had its ups and downs
for Iraq’s oil industry. For the fourth month, overall exports were down. The
main reason was continued problems with leaks and maintenance on the northern
pipeline to Turkey. On the positive side, prices rebounded for crude due to
unrest and output decreases in the Middle East, helping Iraq to earn more than
June. Overall, Iraq’s exports are at a 17-month plateau, but that has not had
any negative consequences for the oil dependent country yet.
Iraq’s exports dropped in July.
There was an average of 2.32 million barrels of day last month. That was
down from 2.33 million barrels in June, and was the lowest average since March
2011. The southern pipeline through Basra actually recovered in July going from
2.19 million barrels in May to 2.13 million barrels in June to 2.32 million in
July. That was the highest amount seen through the south in years. Exports were
affected by bad weather in the Persian Gulf for most of the summer. For all of
2013, Basra’s exports are up from 2.041 million barrels in 2012 to 2.191
million barrels this year. The main reason why Iraq’s exports have had problems
in recent months is the northern Kirkuk line to Turkey. It has witnessed a
five-month decline from 339,200 barrels a day in February 2013 to just 180,600
in July, a real low-mark. The major issue has been leaks and repair work. On
June 19, the line was shut down due to leaks, and not re-opened until July4. The maintenance was slowed due to an insurgent attack upon workers. The
line was immediately shut down however, and oil did not start flowing until July 16. There was another stoppage on July 21, and a bombing on July 28 that contributed to the Kirkuk line being down for almost the entire month
just like it was in June. That has led to the average flow through the pipeline
going from 373,300 barrels a day last year to 269,100 this year. The northern
line is very old, and really showed its age during the summer. Almost every
month for the last two years it has been bombed, but those usually do not have
a real affect upon exports. This recent wave of leaks and maintenance work
however has had a devastating effect upon the entire country’s output, and may
not be resolved anytime soon resulting in Iraq remaining at its present
plateau.
Iraq Oil Exports And Profits
2011-2013
Month
|
Avg.
Exports
(Mil/
Bar/
Day)
|
Avg. Price Per Barrel
|
Revenue (Bill)
|
Jan. 11
|
2.16
|
$90.78
|
$6.082
|
Feb.
|
2.20
|
$98.44
|
$6.064
|
Mar.
|
2.15
|
$107.13
|
$7.167
|
Apr.
|
2.14
|
$114.26
|
$7.342
|
May
|
2.22
|
$108
|
$7.45
|
Jun.
|
2.27
|
$105.17
|
$7.173
|
Jul.
|
2.16
|
$108.79
|
$7.311
|
Aug.
|
2.18
|
$104.91
|
$7.124
|
Sep.
|
2.10
|
$104.89
|
$6.619
|
Oct.
|
2.08
|
$104.04
|
$6.742
|
Nov.
|
2.13
|
$106.59
|
$6.833
|
Dec.
|
2.14
|
$106.18
|
$7.061
|
2011 Avg.
|
2.16
|
$105.00
|
$6.913
|
Jan. 12
|
2.10
|
$109.08
|
$7.123
|
Feb.
|
2.01
|
$112.92
|
$6.595
|
Mar.
|
2.31
|
$117.99
|
$8.472
|
Apr.
|
2.50
|
$116.79
|
$8.795
|
May
|
2.45
|
$103.03
|
$7.831
|
Jun.
|
2.40
|
$90.09
|
$6.487
|
Jul.
|
2.51
|
$97.14
|
$7.577
|
Aug.
|
2.56
|
$106.22
|
$8.445
|
Sep.
|
2.59
|
$107.59
|
$8.371
|
Oct.
|
2.62
|
$105.51
|
$8.578
|
Nov.
|
2.62
|
$104.32
|
$8.200
|
Dec.
|
2.34
|
$103.72
|
$7.551
|
2012
Avg.
|
2.41
|
$106.20
|
$7.835
|
Jan. 13
|
2.35
|
$104.92
|
$7.672
|
Feb.
|
2.53
|
$107.66
|
$7.644
|
Mar.
|
2.41
|
$103.76
|
$7.772
|
Apr.
|
2.62
|
$98.70
|
$7.764
|
May
|
2.48
|
$97.23
|
$7.477
|
Jun.
|
2.33
|
$97.41
|
$6.799
|
Jul.
|
2.32
|
$101.00
|
$7.272
|
2013 Avg.
|
2.45
|
$101.61
|
$7.521
|
Oil
Exports Through Basra 2012-2013
January 2012 1.711 mil/bar/day
January 2012 1.711 mil/bar/day
February
1.639 mil/bar/day
March 1.917
mil/bar/day
April 2.115
mil/bar/day
May 2.086
mil/bar/day
June 2.085
mil/bar/day
July 2.216
mil/bar/day
August
2.252 mil/bar/day
September
2.178 mil/bar/day
October
2.172 mil/bar/day
November
2.122 mil/bar/day
December
2.022 mil/bar/day
2012 Avg. 2.042 mil/bar/day
January
2013 2.093 mil/bar/day
February
2.196 mil/bar/day
March 2.1
mil/bar/day
April 2.31
mil/bar/day
May 2.19
mil/bar/day
June 2.13
mil/bar/day
July 2.32
mil/bar/day
2013 Avg. 2.191 mil/bar/day
Oil Exports Through Kirkuk 2012-2013
January
2012 393,500 bar/day
February
375,800 bar/day
March
400,000 bar/day
April
393,300 bar/day
May 364,500
bar/day
June
316,600 bar/day
July
300,000 bar/day
August
312,900 bar/day
September
420,000 bar/day
October
451,600 bar/day
November
426,600 bar/day
December
325,800 bar/day
2012 Avg. 373,300 bar/day
January
2013 264,500 bar/day
February
339,200 bar/day
March
316,100 bar/day
April
306,600 bar/day
May 283,800
bar/day
June
193,300 bar/day
July 180,600
bar/day
2013 Avg. 269,100 bar/day
Iraq did benefit from a rebound in
prices in July. After prices being below $100 per barrel for the country’s oil
from April to June, it rose to $101.00 per barrel last month. That was largely due
to cuts in production from Libya and the unrest in Egypt. That led Iraq to earn
$7.272 billion in July. That was still the second lowest amount for the year.
Prices are still below their 2012 mark of $106.20 per barrel, currently
standing at $101.52 in 2013. Profits have declined as well from an average of
$7.835 billion in 2012 to $7.485 billion in 2013. Luckily for Iraq these prices
and revenues are still above those set in the 2013 budget, so the government,
which is dependent upon petroleum has not faced any real consequences from the
up and down nature of the industry this year.
While Iraq has not had any
negative consequences from the present export plateau, it does bring into
question its development plans for the future. Iraq is hoping to become one of
the largest oil producers in the world in the near future. Each year it claims
that it will witness a large jump in production and exports, which have rarely
been met. In December 2012 for instance, the Oil Ministry said at an OPEC
meeting that it would reach 3.7 million barrels a day in production by the end
of 2013, which was then revised down to 3.4 million barrels. In July, production
was at 3.25 million. Because the country lacks adequate storage facilities,
when exports are reduced the output at the fields has to be reduced as well.
This is a major complaint of the international oil companies operating in Iraq.
Their contracts with the government set production levels they have to reach. This has led to all of the businesses to begin negotiations with the
central government to revise their deals. It also highlights the country’s lack
of infrastructure to sustain any large increases right now. The Oil Ministry
has plans to address that issue, but its work is very slow due to red tape and
lack of trained staff. The result is that the current constraints on
development will remain in place for the foreseeable future.
SOURCES
Agence France
Presse, “Iraq Oil Exports,” 8/20/13
- “Iraq oil
exports hit 16-month low despite higher production,” 8/8/13
Dananer,
“Kirkuk Line – Ceyhan: the resume and stop,” 8/1/13
Mackey, Peg,
“Iraq headed for 1st annual oil output drop in three years,”
Reuters, 7/29/13
Al-Mada, “Iraq
is losing 400 thousand barrels of oil because of the violence and attacks
threaten to paralyze the line Kirkuk – Ceyhan,” 7/27/13
- “Resume
pumping oil from the Kirkuk oilfields to the Turkish port of Ceyhan,” 7/4/13
Platts,
“Iraq’s Kirkuk crude shut again following second failed restart,” 7/12/13
Radio Nawa,
“Resume pumping oil through the line of Kirkuk – Ceyhan after a stopover due to
leakage 3 weeks ago,” 7/11/13
Rasheed,
Ahmed, “UPDATE 2-Iraq oil exports stagnate, deep cuts ahead due to port work,” Reuters,
8/7/13
Reuters, “Bomb
attack halts oil flow through Kirkuk-Ceyhan pipeline: Iraq officials,” 7/28/13
- “Crude oil
flows through Iraq-Turkey pipeline down,” 7/22/13
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