Iraq’s
oil industry continues to see incremental, yet sometimes inconsistent growth.
September saw a small increase in exports, which still marked the highest level
since 2003. That was in part due to Kurdistan re-starting its foreign sales. At
the same time, revenues for last month were nearly the same as August. The
problem as ever is the lack of adequate infrastructure. That remains the
largest impediment to Iraq achieving its energy goals.
September
2012 saw another post-invasion high in Iraq’s oil business. For the month, the country exported an average of 2.600 million barrels a day. That was
slightly up from the 2.564 million barrels seen in August. Exports have been
going up for the last three months starting in July. Before that they were
heading up and down. Still, September’s mark was the largest amount of
petroleum sent abroad since the 2003 invasion. Iraq is now the second largest exporter amongst OPEC countries as a result, having surpassed Iran. The Oil
Ministry stated that it hopes to reach 2.9 million barrels a day in exports by
2013. That seems a reasonable goal. The issue is how much the nation’s
pipelines and port can handle.
Iraq Oil
Exports And Profits 2011-2012
|
Month
|
Avg.
Exports
(Mil/
Bar/
Day)
|
Avg.
Price Per Barrel
|
Revenue
(Bil)
|
|
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
|
$8.442
|
|
Sep.
|
2.60
|
$107
|
$8.4
|
Oil
Exports Through Basra 2012
January 1.711 mil/bar/day
January 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
2.180 mil/bar/day
Oil Exports Through Kirkuk 2012
January
395,000 bar/day
February
375,000 bar/day
March
400,000 bar/day
April
393,000 bar/day
May
366,000 bar/day
June
318,000 bar/day
July
294,000 bar/day
August
313,000 bar/day
September
410,00 bar/day
Iraq’s
two major pipelines saw opposing trends last month. Basra, the mainstay of the
industry, exported an average of 2.180 million barrels a day in September. That
was down from August’s 2.252 million barrels, and July’s 2.216 million. The
northern line from Kirkuk to Turkey on the other hand saw 410,000 barrels a day
of exports in September. That was the highest amount since March when it handled
400,000 barrels a day. The increase was due to Kurdistan restarting its oil exports in August. It pumped around 120,000-140,000 barrels a day
last month. The reason for the decline in southern output was not detailed. It
could be due to any number of issues from technical problems to bad weather,
which usually beset Basra.
Despite
the slight increase in exports from the south, the oil fields there have been
showing steady expansion. By the middle of September, they were producing around 2.5 million barrels. The only setback has been the Majnoon field,
which shut down in June for maintenance, and won’t restart until the beginning
of next year. Iraq could be exporting even more if not for the lack of
infrastructure. The southern fields are actually producing far more than the
country can handle presently. The government is slowly dealing with this
problem. Last month for instance, the Oil Ministry and Italy’s Eni signed a
$358.8 million deal with SICIM to install new pipelines at the Zubayr field. After years of war and sanctions, Iraq needs everything for its oil
industry to see further progress from new lines, to pumping stations, to
storage facilities, to refineries. Unfortunately, planning is sometimes based
upon short-term goals, and there is always the red tape and bureaucracy, which
slows everything down.
On the
other hand, Iraq is still benefiting from high petroleum prices due to
instability in the world market. In September, the average price of Iraqi crude
sold for $107 a barrel. That was up from $106.22 seen in August. For two
months this year, prices dipped below $100 for the first time since February
2011, but now they have gone back up, because of the fighting in Syria, and
sanctions on Iran. As a result, Iraq earned $8.4 billion in September, which was basically the same as August. As long as there is conflict going on
in the Middle East, and so far there has not been a shortage of that, Iraq will
be reaping the profits. This is important for the country as a whole, as oil
provides over 90% of the government’s revenues, and fuels the budget and gross
domestic product.
Iraq’s
oil output is always a little unpredictable. There can be months of growth,
only to see a decline. For three months now exports, prices, and profits have
been going up. Before that, there was a two-month decline. That’s simply the
nature of Iraq’s petroleum business. Until it builds all of the infrastructure
that it needs there will always be these ups and downs as one little setback
can affect the entire network, and cause a drop. Still, the long-term looks
bright. It’s just a matter of how long will it take to put together all of the
necessary parts for Iraq to reach its full potential.
SOURCES
Agence
France Presse, “Iraq September oil exports slightly higher,” 10/1/12
Ajrash,
Kadhim, “Iraq Crude Output Rises to Highest Since 1979, Oil Ministry Says,”
Bloomberg, 9/25/12
Hafidh,
Hassan, “Italy’s SICIM Secures $358.8 Million Iraq Zubair Oil Field Deal –
Spokesman,” Dow Jones, 9/18/12
Mohammed,
Aref, “UPDATE 1-Iraq’s southern oil output at 2.5 mln bpd – SOC oil chief,”
Reuters, 9/11/12
Rasheed,
Ahmed, “UPDATE 2-Kurdistan warns Baghdad it will halt oil exports again,”
Reuters, 8/28/12
Razzouk,
Nayla, “Iraq’s Kurds Say Crude Exports Rise to 140,000 Barrels a Day,”
Bloomberg, 9/20/12
Republic
Of Iraq Ministry of Oil, “Crude Oil Exports”
Sabri,
Abdullah, “Kurdistan may increase its oil exports to more than 250,000 bpd,” AK
News, 9/19/12
Shafaq
News, “Oil Ministry: rate of exports for September rose,” 10/2/12
Yackley,
Ayla Jean, “Shell sees Majnoon resuming oil output in Q1,” Reuters, 9/18/12
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