Iraq's Southern Oil Output Rises, Leak Fixed

Source: Reuters 9/23/2013, Location: Middle East

Iraq has boosted oil output from its southern oilfields after repairing a leaking pipeline, two oil officials said, although planned work was continuing to keep a lid on exports from OPEC's No. 2 producer.

Iraq's oil revival, which got under way in 2010, has slowed this year due to infrastructure and security problems, keeping production below targets and sometimes even below last year's levels of 3 million barrels per day (bpd).

The leaking pipeline had prompted output at the Rumaila oilfield to be cut back, temporarily adding to the impact of planned work at the Basrah Oil Terminal which has reduced the export capacity in the south - Iraq's main outlet.

Two oil officials said Iraq had restored normal output from the southern oilfields on Sunday after repairing the leak to an ageing pipeline buried three metres underground due to corrosion.

"We are planning to pump higher crude shipments for the rest of September to compensate for the reduced exports due to the pipeline leak," a senior oil official said.

In light of the recent leak, Iraq has decided to evaluate all its key oil pipelines in the south to avoid future disruption from technical problems, an Iraqi oil ministry official said.

"We reached a decision to push ahead with building new key pipelines in the south to make sure we have plan B for any possible disruption to crude flow," the official said.

Production from Rumaila, the workhorse of Iraq's oil industry, had climbed to around 1.35 million bpd on Sunday after the pipeline leak cut output last week to 870,000 bpd, oil officials close to Rumaila operations said.

Oil was flowing to the southern terminals at 2.33 million bpd on Monday, shipping data seen by Reuters showed, up from 1.92 million bpd on Sunday.

Export capacity remains reduced as two of the terminal's four berths are shut for planned work, which is limiting southern export capacity to around 1.7 million bpd according to trade sources.

So far in September, Iraq has exported about 1.74 million bpd from its southern ports, according to shipping data. It exported 2.3 million bpd from its southern ports in August.

Iraq has sent mixed messages about the impact of the port work on supplies. An official from Iraq's Southern Oil Company said it would cut shipments by up to 500,000 bpd, although other Iraqi sources such as the State Oil Marketing Organisation have said the drop would be less.

Iraq is the second-largest producer in the Organization of the Petroleum Exporting Countries, behind Saudi Arabia.

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