Tuesday, July 29, 2014

Iraq’s Southern Oil Industry Untouched By Insurgency But Technical Problems Continue


While several small oil fields have fallen under the control of the Islamic State in northern Iraq the vast majority of the country’s reserves reside in the south and have been unaffected. In fact, new infrastructure recently opened that expanded the capacity for southern exports. That doesn’t mean output can’t continue to fluctuate like it always has. In June 2014 exports were down from May due to technical issues and an accident.  

Problems with docking tankers were the main reason why June exports decreased. Last month Iraq exported 2.423 million barrels a day compared to 2.582 million barrels in May. All of this output went through the southern Basra pipeline. There were troubles with docking tankers at the Basra and Khor Amaya oil terminals along with a tanker hitting a mooring point that temporarily took it off line. This was the third lowest output of the year after March’s 2.396 million and January’s 2.228. 

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
$7.47
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
$8
Jun.
2.40
$90.09
$6.453
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
$7.846
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.
2.32
$97.40
$6.799
Jul.
2.32
$101.00
$7.272
Aug.
2.57
$104.45
$8.356
Sep.
2.07
$104.87
$6.511
Oct.
2.25
$102.57
$7.160
Nov.
2.381
$102.57
$7.324
Dec.
2.341
$102.89
$7.470
2013 Avg.
2.386
$102.33
$7.435
Jan. 14
2.228
$102.37
$6.454
Feb
2.799
$102.05
$7.159
Mar
2.396
$101.03
$7.429
Apr
2.509
$100.69
$7.582
May
2.582
$100.69
$8.077
June
2.423
$102.61
$7.47

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
November 2.281 mil/bar/day
December 2.081 mil/bar/day
2013 Avg. 2.16 mil/bar/day
January 2014 2.036 mil/bar/day
February 2.507 mil/bar/day
March 2.370 mil/bar/day
April 2.509 mil/bar/day
May 2.582 mil/bar/day
June 2.423 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
November 309,00 bar/day
December 260,000 bar/day
2013 Avg. 264,200 bar/day
January 2014 192,000 bar/day
February 292,000 bar/day
March 25,806 bar/day
April 0 bar/day
May 0 bar/day
June 0 bar/day

At the same time capacity at the southern ports just expanded. At the beginning of June a third single mooring point opened. That went along with a new metering platform that started working in May. The mooring points can’t all operate at the same time right now, but it does mean that there can be uninterrupted loading of tankers while repair and other work is being done, which has cut exports in the past. A fourth platform is scheduled to come on line by the end of the year. With the current added capacity Oil Minister Abdul Karim Luaibi announced in mid-July that production was around 3.15 million barrels and exports were over 2.6 million. The opening of the new mooring points come just as Rumaila, West Qurna 1 and 2, Zubayr, Halfaya, and Badra fields are expected to increase their output. This added production and capacity would help make up for the loss of the Kirkuk pipeline, which was knocked out of commission in March by an insurgent attack, and now mostly lies in militant hands.

Ironically the summer insurgent offensive has raised oil prices. In June Iraqi crude sold for $102.61 per barrel, up from $100 per barrel in April and May. June was the highest price since December 2013’s $102.89. Iraq earned $7.47 billion in June as a result. That was down from May’s $8.077 billion however, because oil exports dropped. The continued fighting in Iraq and other unrest in the Middle East will likely keep crude prices up.

The Oil Ministry is hoping that its exports will rebound in July. Early figures show that’s already happening. That doesn’t mean technical problems wont continue to occur in the future leading exports to fluctuate again. It can only be hoped that overall exports grow over the long run and oil prices stay at $100 per barrel or more since Baghdad needs as much money as it can get right now to pay for its on going security and refugee crisis.

SOURCES

Iraq, Ali Abu, Lando, Ben, “Besieged Iraqi oil sector buoyed by southern expansion,” Iraq Oil Report, 7/20/14

Lando, Ben, “Iraq oil exports drop in June,” Iraq Oil Report, 7/9/14
- “New Gulf infrastructure opens up export growth,” Iraq Oil Report, 6/4/14

Lando, Ben, Al-Najaf, Kamaran, “Iraqi exports rebound despite loss of northern pipeline,” Iraq Oil Report, 5/4/14

New Sabah, “”Oil” launches a new floating platform capacity of 800 thousand barrels per day,” 6/2/14

Republic of Iraq Ministry of Oil, “Iraq Crude Oil Exports – June 2014,” 7/24/14

Salaheddin, Sinan, “Iraq says crude oil exports rise slightly in May,” Associated Press, 6/1/14

Ynewsiq, “Decline in oil exports to 2.423 million barrels per day,” 7/3/14

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