Iraqi Infrastructure Constraints Overshadow Southern Export Record

Iraq’s southern crude exports hit record levels last month. But the northern export pipeline is likely to remain out for some time. Together with other infrastructure bottlenecks this means that while Iraq’s wellhead capacity may hit Baghdad’s 4mn b/d target by end-2014, sustained output at this level is unlikely.

Iraq exported 2.51mn b/d of crude in April, up from an average 2.40mn b/d in March but still below a post-1980 record of 2.8mn b/d achieved in February this year, according to oil ministry figures. Production and exports would have been higher were it not for the continued stoppage due to sabotage of the northern Kirkuk-Ceyhan oil pipeline, which has been offline for eight weeks. Iraqi repair crews have been unable to reach the site due to insurgent activity in the area just south of Mosul in Nineveh province.

The oil ministry has admitted that the army has been unable to secure the area, suggesting that the main northern export pipeline is likely to remain inoperable for some time. Iraq exported crude exclusively from expanded facilities at its southern oil terminals of Basra and Khor al-‘Amaya and the April number represents a new high for exports from the south. However, production is still curtailed at some major fields, including southern workhorse Rumaila, because of continued infrastructure bottlenecks and lack of storage facilities. Current production from Rumaila is estimated at 1.4mn b/d though the first quarter average is likely to be lower, due to the need to restrain output several times to accommodate rises elsewhere and to cope with the storage bottlenecks. (CONTINUED - 1670 WORDS)