Iraq's Southern Oil Exports on Track for April Record

Source: Reuters 4/23/2014, Location: Middle East

Oil exports from Iraq's southern terminals are heading for a record high in April, according to loading data and industry sources, reflecting Iraq's efforts to expand capacity and deliver supply growth in 2014.

But shipments of Kirkuk crude from northern Iraq remain offline since a bomb blast first halted the oil flow along the pipeline on March 2, industry sources said, keeping Iraqi exports overall below their potential.

Exports from Iraq's southern terminals have averaged 2.55 million barrels per day (bpd) in the first 23 days of April, according to shipping data tracked by Reuters. An industry source, who also monitors the exports, had a similar estimate.

If that is sustained for the rest of April, southern exports this month would top February's level of 2.50 million bpd, the highest since 1979. But traders are not expecting Kirkuk, which would lift overall exports even higher, to return imminently.

"There has been no Kirkuk in April and it does not look good for May either," said a trading source at a company which buys Iraqi oil, who added there were still delays to Basra shipments but the situation was better than a few months ago.

Iraq has expanded its southern export capacity and an Iraqi official said on April 3 the country was aiming to boost shipments above 2.5 million bpd in April due to extra crude from a new oilfield, West Qurna-2.

Russian oil company Lukoil started commercial production from the field in late March, and production is eventually expected to reach 1.2 million bpd, 10 times higher than the initial rate.

Without exports from Iraq's northern Kirkuk fields via pipeline to Turkey, overall shipments are set to be below February's rate of 2.8 million bpd - which Deputy Prime Minister for Energy Hussain al-Shahristani described as a record.

Since a March 2 bomb attack which stopped the pipeline flow, saboteurs - described as Islamists by Iraqi officials - have set several more bombs. Attacks on repair crews have also prevented any restart.

A dispute between Iraq's central government and Kurdish authorities has additionally hampered northern exports. Talks between Baghdad and the Kurdistan government have yet to produce a deal.

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