Thursday, November 7, 2013

Continued Maintenance Work Keeps Iraq’s Oil Exports Down In October 2013

 
The maintenance work on Iraq’s southern oil infrastructure, which started in September 2013 continued into the middle of October. This is important construction as it is supposed to lay the foundation for further expansion of the industry that is planned for next year. As a result of the work however exports have been down for the last two months. The Oil Ministry wanted to boost output in October to make up for the cutbacks in September. The figures did go up last month, but were still down from the yearly average.

October’s export numbers were better than September’s, but still below expectations. Last month Iraq exported an average of 2.25 million barrels a day. That was up from 2.07 million barrels in September, which was the lowest amount since February 2012 when there was an average of 2.01 million barrels. Exports were cut in September because of repair work on the southern export terminals and related pipelines. That continued into the middle of October when all four loading berths in Basra were finally up and running again. The Oil Ministry was hoping that it would be able to increase output in October to make up for September, but that didn’t quite work. That was seen in Basra’s export figures. In July it exported an average of 2.32 million barrels, then 2.30 million in August before the dip to 1.90 million in September, and then slightly recovering to 2.06 million in October. To make matters worse, the northern Kirkuk line saw a drop in October as well. In August it exported an average of 270,900 barrels, then 250,000 barrels in October, and 193,000 in October. All the statistics were below the yearly average. For the year the southern line has been at 2.159 million barrels, the north at 259,800 barrels, and overall exports at 2.39 million.

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
Oct.
2.25
$102.60
$7.17
2013 Avg.
2.39
$102.25
$7.443

Oil Exports Through Basra 2012-2013
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
October 2.06 mil/bar/day
2013 Avg. 2.159 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
October 193,000 bar/day
2013 Avg. 259,800 bar/day

Prices for Iraqi crude saw a slight decline in October as well. For the month a barrel of Iraqi petroleum went for $102.60, down from the previous two months when it was at $104. That brought in $7.17 billion in October, up from September’s $6.511 billion. That was the third lowest amount for the year, and below the annual average of $7.443 billion.

Despite the slight setback in October, the Iraqi government still has big plans heading into 2014. It’s hoped that the work in Basra will allow export capacity there to increase to 4.5 million barrels a day. The south is where the vast majority of the country’s petroleum reserves lay, and where most of the major foreign companies are operating. Bottlenecks and bad weather in the south largely regulate how much the country can ship. Last month also saw Lukoil begin pumping at the West Qurna 2 field for the first time. Finally, in anticipation of that future growth the Oil Ministry announced three new state-run energy companies in October. Those included the Oil Services Company, the Crude Oil Pipeline Company, and the Gas Pipeline Company. (8) The Oil Services Company will deal with extracting oil, drilling, and maintenance work on oil wells. The Crude Oil Pipeline Company is going to operate pumping stations for storage depots and handle pipeline repairs. The Gas Pipeline Company will have responsibility for the storage, exports, and local use of natural gas. The hydrocarbons industry is state-run after being nationalized in the 1970s.

Iraq aspires to be one of the largest oil producers in the world in a few years. Its old and decrepit infrastructure, red tape, and other issues have consistently held up these plans. The work in the south was part of the process to expand the nation’s capacity. While exports dropped for two months the predictions are that they will see a large increase next year.

SOURCES

Aswat al-Iraq, “Increase in Iraqi oil exports for October, 2013,” 11/1/13

Bierman, Stephen, “Lukoil Pumps Oil at Iraq’s West Qurna-2, Sees Sales by Year-End,” Bloomberg, 10/25/13

Lee, John, “Basra Export Terminal Fully Reopened,” Iraq Business News, 10/15/13

Al Rafidayn, “Average Iraqi oil exports rise to 2.253 million b / d in October,” 11/2/13

Reuters, “Iraq crude exports drop in September,” 10/4/13

Al-Taie, Khalid, “Iraq sets up 3 national energy companies,” Al Shorfa, 10/17/13

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