Iraq oil industry and the crisis

Tuesday 17 June 2014 12.30
Iraq's northern exports of 300,000 bpd have been shut since early March due to attacks on a pipeline
Iraq's northern exports of 300,000 bpd have been shut since early March due to attacks on a pipeline

Iraq's oil exports have not so far been affected by escalating violence in the country this week, although attacks on its northern pipeline have slowed down exports since March. 

Militants from the Islamic State in Iraq and the Levant (ISIL) overran the northern city of Mosul earlier this week and have since pressed south towards Baghdad in an onslaught against the Shi'ite-led government. 

Iraq has been expanding production in the south since Western oil companies signed a series of service contracts with Baghdad in 2010.

Exports from Iraq's southern terminals have been rising and reached 2.58 million barrels per day in May, the oil ministry said. This is the highest since at least 2003.

But Iraq's northern exports of 300,000 bpd have been shut since early March due to attacks on the pipeline to Turkey.

Southern facilities

Key oil fields include Rumaila, West Qurna-1 and Zubair. The giant West Qurna-2 field began commercial production in March.
Almost all Western oil majors work with Baghdad on joint projects including Exxon Mobil, BP, Royal Dutch Shell, ENI, Russia's Gazprom Neft Lukoil and several Chinese firms.

Iraq's three southern export outlets are the Basrah Oil Terminal, its Single Point Morings and the Khor al Amaya terminal. Basrah is the largest, exporting almost 1.4 million bpd in May, according to shipping data. 

The SPMs provided another 1.1 million bpd while the smallest outlet, Khor al Amaya, shipped three 700,000-barrel cargoes.

Northern oilfield

The Kirkuk oilfield is the basis of Iraq's northern production. Kirkuk is connected to world markets by pipeline to Turkey's port of Ceyhan. Exports have been shut since early March due to attacks on the pipeline.

Iraqi Kurdish forces took advantage of the chaos to take control of the oil hub of Kirkuk as the troops of the Shi'ite-led government abandoned posts, alarming Baghdad's allies both in the West and in neighbouring Shi'ite regional power Iran.

Although the pipeline from Kirkuk has been shut since March, Kurdistan has been exporting some of its own oil output by truck and via a new pipeline to Turkey, although those exports have been curtailed by pressure from Baghdad on buyers not to touch that oil.

Baghdad believes its state oil firm is the sole company which can export crude from Kurdistan.

A second tanker carrying crude has left Ceyhan, Turkish Energy Minister Taner Yildiz said last week.

Keywords: iraq, oil