Iraq's Oil Exports Rise 7.6 Pct in April on Month

Source: Reuters 4/30/2013, Location: Middle East

Iraq's oil exports rose in April to 2.6 million barrels per day (bpd), the country's oil minister said on Tuesday, helping to keep global markets well supplied as shipments from regional rival Iran are crimped by tightening Western sanctions.

Rising exports may help Iraq cement its position as OPEC's second-largest producer, even though creaking infrastructure and civil unrest hampering work at some of its top fields have kept the country short of a 2013 target of 2.9 million bpd.

Kirkuk is the key field holding back Iraq from boosting exports. Part of the so-called disputed territories claimed by both the Arab-led central government and the autonomous Kurdistan region in the north, it sits on 8.5 billion barrels of crude reserves.

"It is a pity as 250,000 bpd of supply from Kurdish fields has been suspended," Oil Minister Abdul Kareem Luaibi told reporters in the South Korean capital.

"If the supply from the northern region is resumed, on which we continue to have discussions, we think our export target of 2.9 million bpd will be reached."

Iraq's total oil production was 3.1 million bpd in April, Luaibi said, adding that the country was sticking with its 2013 export target, and targets 3.4 million bpd next year.

Iraq's oil exports were 2.417 million bpd in the previous month.

Rising exports have also kept a lid on oil prices, despite the fall in Iran's sales. Tough Western sanctions on Tehran over its controversial nuclear programme have increased the difficulty of paying for and shipping the oil, cutting exports by more than half last year.

After stagnating for decades due to wars and sanctions, Iraq's oil output and exports have began to rise in earnest since 2010, after Baghdad secured service pacts with firms such as BP, Royal Dutch Shell, Eni and Exxon Mobil.

Shell will resume operations at the Majnoon oilfield as planned on May 1, with an initial production of 100,000 bpd, Luaibi said. The minister said he expected output from the Majnoon field to reach 175,000 bpd soon.

Luaibi, in Seoul to strengthen ties between the two nations, said Iraq was exporting 200,000 bpd of crude to South Korean refiners in 2013 under term contracts, but gave no details.

Asian refiners are scouring for alternative supplies as they continue to reduce dependence on Iranian oil to ensure they qualify for a six-monthly exemption from U.S. sanctions, or risk getting cut off from the U.S. financial system.

South Korea cut Iranian crude imports by 36 percent to 153,000 bpd in 2012.

Ali Nazar, a senior official at state-run Iraqi oil marketing company SOMO who accompanied Luaibi, said South Korean refiners were asking for an increase in term supplies of Iraqi oil over last year's figure, and also wanted more for next year, but declined to give any specific figure.

For more information about related Opportunities and Key Players visit Iraq Oil and Gas Projects

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