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Iraq Plans To Export 2.75M B/D In 2012 Vs 2.2M B/D 2011-SOMO

Thursday, Nov 24, 2011

(This item was originally published Wednesday.)

   By Hassan Hafidh 
   Of DOW JONES NEWSWIRES 
 

BAGHDAD (Dow Jones)--Iraq is planning to raise its crude oil exports to 2.750 million barrels a day next year, compared with a target of 2.2 million barrels a day this year, head of the State Oil Marketing Organization , or SOMO , said Wednesday.

Falah Alamri said the oil ministry is targeting to export some 2.270 million barrels a day from southern oil fields, while it wants to export some 480,000 barrels a day from northern oil fields including those in the semiautonomous region of Kurdistan.

SOMO , however, has concluded term crude contracts to sell nearly 3 million barrels a day in 2012, an increase of 15% above figures for last year in anticipation of a burst of new production and exports from the country's oil developments.

"We usually conclude term contracts for quantities more than what we actually sell," Alamri said.

Most of Iraqi Basra light crude in 2012 will go to Asian customers, with 52% of the term volume allocated to lifters there. Buyers in Europe account for 23%, while 25% is earmarked for customers in the U.S., Alamri told Dow Jones Newswires in an interview.

Some 78% of Kirkuk crude will go to the U.S. in 2012, while the remaining 22% will go to customers in Europe, he said.

Alamri also said that the Iraqi government has paid more than 90% of the $2.7 billion that Baghdad has to pay international companies in 2011 for upgrading three southern giant oil fields, Rumaila, West Qurna Phase 1 and Zubair.

The three fields are being developed by consortia led by BP PLC ( BP ), Exxon Mobil Corp. (XOM) and Eni SpA (E) respectively.

He gave no details of how much each of the three companies would get. But he said that some of the payments were in cash while others were in kind which means in crude oil.

Next year, Alamri said, Iraq has to pay these companies double that figure.

SOMO has already signed a term contract with U.S. supermajor Exxon Mobil to supply it with crude in 2012 despite an impasse with Baghdad over its decision to invest in Kurdistan. The Iraqi government is threatening to terminate the firm's West Qurna 1 contract in retaliation.

"So far we haven't received instructions from the ministry to stop dealing with Exxon Mobil," Alamri said.

Exports this year have been 2.167 million barrels a day--less than the target of 2.2 million barrels a day. The main cause for not reaching the planned target was bottlenecks at export facilities in southern Iraq, Alamri said.

But he said that hurdle would be removed when a new floating terminal with a capacity of 900,000 barrels a day at the southern Basra terminal starts operation early next year. "Our export capacity from the south is currently at 1.75 million barrels a day and that will be increased to 2.6 early next year."

The capacity of the northern export pipeline is around 700,000 barrels a day which can absorb any future increase of exports from the north, he added.

He said the Kurds are pumping less than 100,000 barrels a day and expects them to pump some 150,000 barrels a day next year. "They have been pumping an average of 79,000 barrels a day so far this month."

Kurdish oil officials said last week in Erbil in northern Iraq that they have been contributing an average of 100,000 barrels a day to the country's total exports since February this year, and they are planning to increase to 175,000 barrels a day next year.

Oil Ministry officials in Baghdad expect production next year to move toward 3.4 million barrels a day.

-By Hassan Hafidh; Dow Jones Newswires; +962 799 831 831

(END) Dow Jones Newswires

24-11-11 0353GMT