September and October 2013 saw major maintenance work on
Iraq’s ports in Basra which account for the vast majority of the country’s oil
exports. That caused a decline in sales for September, but prices remained
high, and the flow through the southern pipeline was actually higher than
scheduled. At the same time two oil fields came on line, and there are
continued plans for a large expansion in production and exports by the end of
the year into 2014. Iraq’s petroleum industry is steadily moving forward, but not
at the tremendous rates originally predicted.
Repairs to Iraq’s two southern ports caused a large decline
in exports for September 2013. For that month the country exported an average
of 2.07 million barrels a day. That was down from 2.58 million barrels in
August, and the lowest amount since October 2011 when Iraq exported 2.08
million barrels. The maintenance work shut down two of Iraq’s four mooring points in Basra, and extended into mid-October. The construction was
supposed to increase capacity in the south. There was also a leak in the
pipeline system at the Rumaila oil field. All together that led the Basra
pipeline to only export 1.90 million barrels in September, down from 2.30
million in August. That was the lowest amount since February 2012’s 1.639
million barrels, but was higher than the Oil Ministry scheduled for the month,
which was 1.8 million. For the year, the south has exported an average of
2.171 million barrels. For the north, the Kirkuk line exported an average of
250,000 barrels a day in September, a decline from August’s 270,900, but still
better than June and July when the pipeline was beset by leaks and repair work
that kept exports below 200,000 for each month. In 2013 the Kirkuk line has
exported an average of 267,200 barrels. The Oil Ministry said it expected
higher exports in October to make up for the drop in September. So far 2013’s
exports have not grown from last year and stand at an average of 2.41 million
barrels for the last 21 months.
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
|
Aug.
|
2.58
|
$104.45
|
$8.356
|
Sep.
|
2.07
|
$104.84
|
$6.511
|
2013 Avg.
|
2.41
|
$102.21
|
$7.474
|
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
August 2.30
mil/bar/day
September
1.90 mil/bar/day
2013 Avg. 2.171 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
August
270,900 bar/day
September
250,000 bar/day
2013 Avg. 267,200 bar/day
Iraq’s revenues went down in September as well, although
prices remained high. For the month the nation earned $6.511 billion, which was
the lowest since June 2012 when it brought in $6.487. On the other hand, the
country continued to benefit from continued tensions in the Middle East. That
raised prices for Iraqi crude from $104.45 in August to $104.84 in September.
It seems like the value for Iraqi oil will remain high for at least the short
term, so profits will stay up despite September’s dip. For the year Iraq has
been averaging $7.474 billion a month, and sold its oil for $102.21 per barrel
despite three months when it fell below $100.
Iraq’s production has continued to go up. In September Shell
restarted pumping at the Majnoon field in Basra. It had been closed for
several months due to maintenance work. The company wants it to reach 175,000
barrels a day by October. Malaysia’s Petronas also started producing at Gharraf
in Dhi Qar province at 35,000 barrels a day. Oil Minister Abdul Karim Luaibi told
the press that the goal is to reach 3.5 million barrels a day in output and
2.9 million in exports by the end of December. Asian countries such as
China and India will be driving demand for that increase into 2014. The problem
is overcoming the bottlenecks, maintenance work, and bad weather that
constantly plagues the petroleum industry. Several undersea pipelines in Basra
are corroding, which means they can’t operate at capacity. There has been
delays in building new storage tanks in Basra. There’s limited pumping capacity
at some fields. The Basra ports are often hit by bad weather that limits the
ability of ships to dock. The Oil Ministry needs to invest in a water injection
system to extract oil from the southern fields. The Kirkuk line is in even
worse shape, as it is old and corroding, plus it is often attacked by
insurgents. On September 17 and September 27 (1) the pipeline was bombed in
Ninewa. The Oil Ministry wants to address all of these issues, but the work
takes time. That’s the reason why exports have flat-lined since March 2012 when
two new mooring points were opened in Basra. Expansion will probably continue
to see slow progress despite Baghdad’s plans.
The maintenance on the Basra facilities caused a predicted
dip in exports and profits for the month of September. October is supposed to
see rates return to their previous levels. The oil industry is still at a
19-month plateau however. Much more work is needed to see another jump in
exports as happened at the beginning of 2012. That’s going to happen when the
new mooring points open in 2014. If history is anything exports will then level
off until the next major piece of infrastructure is installed. The business is
seeing steady growth, it’s just not at the pace predicted.
FOOTNOTES
1. Alsumaria,
“The bombing of carrier oil pipeline to Ceyhan Nineveh and found the bodies of
implementing,” 9/27/13
SOURCES
Alsumaria,
“The bombing of carrier oil pipeline to Ceyhan Nineveh and found the bodies of
implementing,” 9/27/13
Al-Ansary,
Khalid & Ajrash, Kadhim, “Iraq to Boost Oil Output This Year as Asian
Demand Strengthens,” Bloomberg, 10/23/13
Berdikeeva,
Saltanat, “Roadblocks on Iraq’s Leap of Faith to Oil Success,” European Energy
Review, 10/8/13
Buratha News,
“Stop Iraqi oil exports to Turkey after the bombing of the carrier tube south
of Mosul,” 9/17/13
Lee, John,
“Basra Export Terminal Fully Reopened,” Iraq Business News, 10/15/13
- “Oil Output
Rises as Leaks Fixed,” Iraq Business News, 9/23/13
Republic of
Iraq Ministry of Oil, “Crude Oil Exports,” 10/25/13
Reuters, “Iraq
crude exports drop in September,” 10/4/13
- “Iraq
southern oil exports drop in Sept,” 10/1/13
- “Iraq’s
southern oil exports slow in September,” 9/14/13
- “Iraq’s
southern oil output remains cut by leak,” 9/17/13
- “Shell
Restarts Iraq’s Majnoon Oilfield, Petronas Has Minor Share,” 9/21/13
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