November saw Iraq’s oil exports
recover after two months of work to facilities in Basra. Both the southern and Kirkuk pipelines witnessed nice
increases. Despite that the country’s exports are at a 21-month plateau
overall, which many analysts and industry sources believe will continue into
2014.
Last month saw a return for Iraq’s two export pipelines. November’s average was 2.381 million barrels a day. That was up from 2.253 million in October. At $102.57 per
barrel that rate brought in $7.3 billion for the month. The backbone of the
industry Basra saw an average of 2.281 million barrels last month. In October it only had an output of 2.06 million
barrels due to maintenance work. Now the line is back on track to where it was
going before that when it went from 2.13 million in June to 2.32 million in July.
The Kirkuk pipeline saw 309,000 barrels a day in November, which was the
highest since March when it pumped 316,100. This occurred despite the line
being bombed on November 2 in Ninewa, which shut it down for a day. For
much of the second half of the year the northern pipeline has been plagued by
massive leaks and related repair work that dramatically cut its output. For 2013
it has been averaging 264,200 barrels a day, down from 373,300 barrels when
Kurdistan was contributing to the Oil Ministry’s exports. The Basra line on the
other hand has gone from 2.042 million in 2012 to 2.17 million in 2013. Still,
Iraq’s overall output has declined from 2.41 million in 2012 to 2.39 million
this year. Overall, the industry has been at a 21-month plateau since new
export facilities were opened up at the beginning of last year.
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
|
Nov.
|
2.38
|
$102.57
|
$7.324
|
2013 Avg.
|
2.39
|
$102.28
|
$7.432
|
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
October
2.06 mil/bar/day
November
2.281 mil/bar/day
2013 Avg. 2.17 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
2013 Avg. 264,200 bar/day
The major issue now is whether
Iraq can overcome this predicament and achieve its ambitious goals. The Oil Ministry wants to reach 3.5 million barrels a day in production and 2.9 million
in exports in 2014. It’s talking about new output from Majnoon, West Qurna
2, Gharraf, Halfaya and Badra next year. Majnoon just came on line, and
West Qurna 2 is supposed to start in March or April 2014. Iraq has growing
demand for its oil in Asia as well from China, India, Japan, and South Korea. The problem is that Baghdad has never been able to meet its marks. The Oil
Ministry originally wanted to hit 3.5 million at the end of this year. That was
actually down from their previous estimate of 3.7 million for 2013, which was
dropped after the Kurds halted their exports. The causes are many. For one
there is a lack of storage capacity in the south. That means whenever exports
go down production has to be cut as well. That’s likely going to happen in the
first quarter of 2014 as bad weather usually hits Basra in the winter limiting
docking there. Second, the Kirkuk line is in bad shape due to age, and needs to
be repaired and renovated to reach even its current capacity. Third, many
analysts don’t think there will be any major infrastructure additions at the beginning of next
year. to alleviate these bottlenecks. Fourth, output may not ramp up as quickly as expected. Developing the
Badra field for example is behind schedule due to delays at customs, lack of
completing work and getting tenders approved, along with security concerns.
That has led some analysts to believe there will only be modest growth next
year. Finally, even if Iraq were to achieve its lofty aims it might harm oil
prices as other countries are ramping up production too. There is already talk
amongst some OPEC members to cut output in 2014 to maintain profits.
Overall, it seems like exports might go up somewhat next year, but not to the
levels Baghdad would like to see.
SOURCES
Agence France
Presse, “Iraq oil pipeline bombed, pumping shut down,” 11/2/13
Al-Ansary,
Khalid & Ajrash, Kadhim, “Iraq to Boost Oil Output This Year as Asian
Demand Strengthens,” Bloomberg, 10/23/13
Faucon,
Benoit, Said, Summer and Kent, Sarah, “OPEC Rift Emerging Over Iraq Output,
Possible Return of Iran,” Wall Street Journal, 11/29/13
Mackey, Peg,
“Iraq sees hefty return to oil growth in 2014,” Reuters, 10/23/13
Mackey, Peg
and Lawler, Alex, “Iraq strives to return to big oil output growth,” Reuters,
11/19/13
Reuters,
“UPDATE 1-Iraq’s November oil exports rise to 2.381 mln bpd,” 12/1/13
Soldatkin,
Vladimir and Golubkova, Katya, “UPDATE 2-Lukoil to launch Iraqi field by April,
double foreign oil output,” Reuters, 11/27/13
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