Iraq to Increase Southern Oil Storage to 8.5 Mln Bbls

Iraq plans to increase its southern oil storage capacity to 8.5 million barrels by the end of 2013, to help cope with export bottlenecks caused by bad weather or technical problems, a senior Iraqi oil official said.

Speaking at the opening of four new oil storage tanks near the southern city of Basra, the head of the state-run South Oil Company said the new facility will add a capacity of one million barrels to existing 5.5 million barrels available.

"Today we have managed to add one million barrels and boost oil storage capacity up to 6.5 million barrels. Another two million barrels capacity will be added by end of 2103,".

Jaffar said the storage capacity increase will help Iraq to pump crude to export terminals at the Gulf for a period of more than a week to avoid export halts during rough weather or any other unexpected glitches at the southern oilfields.

"Shutting down production because of weather has negative impact on oilfields operations, and is a source of tension with foreign oil firms. More storage capacity means less of these problems," Jaffar said.

Export infrastructure, rather than production, is the main hurdle to the OPEC-member keeping exports steady.

Iraq's oil exports fell to 2.34 million barrels per day (bpd) in December from 2.62 million bpd in November due to rough weather and technical problems with a single point mooring terminal in the Gulf.