Iraq Returns as World's Fastest-Growing Oil Exporter

MarineLink.com
Wednesday, March 05, 2014

By Alex Lawler and Peg Mackey, Reuters

Iraq is reclaiming its rank as the world's fastest-growing oil exporter, cushioning consumers from Libyan supply outages for now and, perhaps, reviving OPEC market share rivalries down the road.

Despite worsening violence due to spillover from the war in Syria, Iraq - already OPEC's second-largest producer - is likely to post one of the biggest annual output jumps in its history as BP, Exxon Mobil and other companies tap its southern fields, which are untouched by the unrest.

With many export bottlenecks now cleared at the southern Basra terminals - from which almost all of Iraq's crude is shipped - Baghdad is expected to keep up, or even exceed, the rapid pace of oil sales reached in February - at 2.8 million barrels per day (bpd), a 500,000 bpd rise on the previous month.

"Iraq is doing its best to export as much as possible and directionally things are improving," said a senior oil executive from a major oil company at work in Iraq.

So much so that, after momentum slowed last year, many in the industry expect a significant increase in 2014 from the country that holds the world's fifth-biggest oil reserves.

"We think the average for the year is probably going to be about 2.9 million bpd, so maybe in the latter part of the year there will be a little bit more than that," said a Western oil executive from another company working in Iraq.

If Baghdad can sustain oil sales of 2.8 million bpd, its revenue could swell to more than $100 billion at $100-a-barrel oil. Average exports of just under 2.4 million bpd last year earned Iraq $89 billion.

So far, the leap in Iraqi shipments has yet to weigh on oil prices and is being welcomed by other members of the Organization of the Petroleum Exporting Countries (OPEC), as it is making up for outages in Libya and reduced exports from Iran due to Western sanctions.

"As long as Brent is $100-$110 there is no problem for OPEC and the higher volumes from Iraq are welcome," said a Gulf OPEC delegate. "Their crude is required."

Another delegate agreed, while indicating that view could change should output recover elsewhere.

"When the situation is settled in Libya with production of 1.5 million barrels per day and Iranian crude comes back, it will have an impact on prices. But not now."

Oil Revival
The world's leading oil companies have been expanding Iraq's giant southern fields - Rumaila led by BP, West Qurna-1 run by Exxon and Zubair operated by Eni - since 2010 when they signed a series of service contracts with Baghdad.

That revival, now into its fifth year, prompted Iraq to set an export target of 3.4 million bpd for 2014, including 400,000 bpd from the Kurdistan region, implying output of 4 million bpd, including oil used internally.

Oil experts still see that as optimistic. But growth is returning thanks to the expanded capacity at Basra and further rises from the southern fields of Majnoon, led by Shell, and Halfaya, where PetroChina is the operator.

The imminent start-up of West Qurna-2, operated by Lukoil, should boost flows further. The field is considered the world's second-largest untapped deposit.

Momentum in Iraq's oil growth slowed last year due to technical and security problems as well as a row between Baghdad and the autonomous Kurdish north. These factors could still keep the expansion in check.

The Kurds, at odds with the Iraqi central government over oil rights, stopped exporting via the national network more than a year ago. A pipeline running from Iraq's northern oilfields to Turkey is repeatedly sabotaged, disrupting exports.

Rising violence has not hit operations in the south, but Western companies at work there say deteriorating security and the distraction of end-April elections may be slowing crucial contract approvals.

Last year was Iraq's bloodiest since sectarian violence began to abate in 2008, with nearly 8,000 civilians killed. More than 700 people died in violence in Iraq in February, the United Nations said last week.

Iraq's production last year ran at around 3 million bpd, up a touch on 2012. The slowdown in Iraq, plus disruption in Libyan supply and Iranian sanctions, allowed other OPEC members - chiefly Saudi Arabia, Kuwait and the United Arab Emirates - to avoid large cutbacks in output.

OPEC has for years been able to defer difficult issues over how it divides production, as oil prices have stayed high. Officials' relaxed view of Iraqi growth is likely to change if and when Libya and Iran return.

"Iraqi production did not really grow last year but they seem to be making some sort of headway this year," said an OPEC source. "With Iraq increasing, there are issues in terms of who might have to cut back."

(Editing by Jason Neely)

Maritime Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter July 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Tanker Trends

First LNG Vessel Transits Expanded Panama Canal

Today, the Panama Canal marked another milestone with the transit of the first-ever liquefied natural gas (LNG) carrier through its expanded locks.   Shell-chartered

Port of Rotterdam Throughput Dips in 2016

Compared to the first half of 2015, which saw throughput increased by 6.8 percent, the Port of Rotterdam handled 3 percent less cargo in the first six months of 2016,

Libyan Deal to End Oil Ports Blockade Needs Signing

Libyan Petroleum Facilities Guard (PFG) commander Ibrahim Jathran said on Monday he was ready to end a blockade at key oil terminals, but the U.N.-backed government

Energy

Fuel Consumption, Emissions Monitoring Software Updated

As part of the ongoing Blue Star Delos Renewable Energy Innovation Project, Eco Marine Power (EMP) stated that the Aquarius Management & Automation System (MAS)

Los Angeles Pushes for Valero Terminal Improvements

The Port of Los Angeles has released an Initial Study/Notice of Preparation (IS/NOP) — the first step in the Environmental Impact Report (EIR) process — for a Marine

Canada Seek to contain Oil Spill

Authorities are building a new containment boom to fight an oil spill in a major western Canadian river, officials said on Saturday, after the spill breached a

News

Bangladesh LNG Terminal Edges Closer

Excelerate Energy L.P. (“Excelerate”), Petrobangla, and the Government of Bangladesh executed the Terminal Use Agreement (“TUA”) and the Implementation Agreement

Damen Fishery Research Vessel for Angola

The Damen Shipyards Group has received an order for a state-of-the-art, 74 m Fishery Research Vessel from the Angolan Ministry of Fisheries. This special vessel,

Fuel Consumption, Emissions Monitoring Software Updated

As part of the ongoing Blue Star Delos Renewable Energy Innovation Project, Eco Marine Power (EMP) stated that the Aquarius Management & Automation System (MAS)

Logistics

Will UK Maritime Traffic Rise or Fall on Brexit?

UK container traffic will see more muted growth than expected a few months ago, at least in the short term, says Drewry.   Patrick Walters, Peel Ports’ Group Commercial Director,

Will Container Lines Skip UK Ports on Brexit?

British importers and exporters prefer direct mainline container services calling at their national ports and tend to dislike feeder services, says a Drewry report.

CMA CGM Reopens Spain to Algeria Service

CMA CGM NAF Lines is re-opening  a regular service from Barcelona to Djen Djen on EURONAF service with immediate effect.   First Departure: m/v VEGA OMICRON voy.

Middle East

Libyan Deal to End Oil Ports Blockade Needs Signing

Libyan Petroleum Facilities Guard (PFG) commander Ibrahim Jathran said on Monday he was ready to end a blockade at key oil terminals, but the U.N.-backed government

Antwerp Port Inks Iranian Collaboration

Last week Antwerp Port Authority signed a collaboration agreement with Shahid Rajaee Port Authority which controls the port of Bandar Abbas in Iran.   Bandar

Hapag-Lloyd, UASC Merger

Hapag-Lloyd and UASC have signed a Business Combination Agreement.   The Combined company will rank among the world´s five largest liner shipping companies and

 
 
Maritime Standards Naval Architecture Navigation Offshore Oil Pod Propulsion Port Authority Salvage Ship Simulators Shipbuilding / Vessel Construction Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.1331 sec (8 req/sec)