Glitches halt oil exports from new Iraq terminal
Baghdad, March 21, 2012
Technical glitches have halted exports from Iraq's new offshore oil export terminal for the past week after it loaded just a single tanker, two sources at the state-owned South Oil Company (SOC) said on Tuesday.
The first of four single-point mooring (SPM) terminals, which are being built by Australia's Leighton Holdings, opened on March 8 after being held up for weeks by bad weather and technical issues.
It loaded 2 million barrels of oil into its first ship over the course of five days, marking a major increase in Iraq's export capacity, but has since been shut due to technical problems, the sources said.
They said the second SPM would come on line in April.
"Loading operations at the floating terminal were halted as of March 13 due to technical and operational problems," a source from SOC told Reuters.
Another SOC source said: "We have problems in the control system of the terminal and some valves also need to be fixed."
Iraq's efforts to sharply ramp up its oil production have been choked off by a lack of loading capacity for exports in the Gulf after decades of infrastructure neglect caused by war and economic sanctions.
The four long-awaited new SPM terminals would more than double Iraq's export capability, allowing it to quickly reach its goal of becoming the second-largest OPEC exporter behind Saudi Arabia.
The South Oil Company says the first export platform will initially increase its exports by 300,000 barrels per day, with the four terminals eventually adding 3.4 million bpd to capacity.
Iraq said this month it had increased total output to above 3 million barrels per day for the first time since 1979. Without capacity to store oil for export, it needs the new SPM to be operating in order to sustain that level of production.
Exports last month were barely above 2 million bpd, and Iraq says it expects exports of 2.3 million bpd next month with the new terminal in operation.
Iraq has started a probe into bribery allegations linked to the builder of the SPM, Leighton, after the firm alerted the Australian Federal Police to possible bribery by a subsidiary bidding for work to expand Iraq's oil export facilities.
Iraq has plans to rapidly expand oil production and exports, but needs a massive overhaul of infrastructure wrecked by decades of sanctions and war. Leighton was awarded two contracts valued at around $1.25 billion to expand Iraq's export outlets by installing moorings and pipelines in the Gulf.
The Iraqi government aims to more than double its oil output in the next few years and has set a long-term goal of 12 million bpd that would rank it alongside Saudi Arabia and Russia as one of the world's oil superpowers.
While many experts say that goal is too ambitious, Iraq is still expected to be the biggest source of new oil in the world over the next few years. – Reuters