Iraq, seeking to maximize crude oil exports, opened the first of four planned offshore mooring facilities in the Persian Gulf and intends by March to add 200,000 barrels a day to its capacity for loading tankers there.
The new single-point mooring unit, extending into the sea from the southern oil terminal of Fao, has a potential export capacity of 850,000 barrels a day, Falah al-Amri, chairman of the State Oil Marketing Organization, said in an interview.
Hussain al-Shahristani, deputy prime minister for energy affairs, said in a separate interview today that Iran probably won’t shut the Strait of Hormuz, a waterway at the mouth of the Gulf and a chokepoint for about a fifth of all traded crude.
“This would affect all the countries, including Iran itself,” he said of that nation’s threats to close Hormuz in response to sanctions over its nuclear program. “We are working with other countries to contain the situation and make sure crude exports in the region are not affected.”
Iraq holds the world’s fifth-largest crude deposits including Canadian oil sands, according to data from BP Plc. The government is trying to attract foreign investment and expertise to help boost energy exports and rebuild an economy shattered by years of conflict, sanctions and sabotage.
The four offshore units would increase the country’s export capacity by a combined 3.4 million barrels a day by 2013. Iraq, with a narrow coastline pinched between Kuwait and Iran, plans to install an undersea pipeline to each unit and load oil aboard tankers capable of mooring there. The nation also exports crude overland by pipeline through neighboring Turkey.
“We are ready to market these new capacities, particularly in promising markets in Asia where our crude exports to China currently average 500,000 barrels a day,” al-Amri of the marketing organization said during a ceremony that Prime Minister Nouri al-Maliki attended to inaugurate the facility.
Oil exports from southern Iraq will increase to 2.1 million barrels a day within four months from 1.7 million barrels today, al-Amri said. Exports from northern Iraqi oil fields will probably rise to 450,000 barrels a day within four months from 400,000 barrels now, he said.
“The start of the new facility releases some of the constraints on Iraq’s crude export capacity,” Robin Mills, an analyst at Manaar Energy Consulting in Dubai, said in a telephone interview. “The next thing to do is to add pipeline capacity and increase production.”
Iraq plans also to open export routes for crude through neighboring Syria, following Iran’s threats over Hormuz, Thamir Ghadhban, the Iraqi prime minister’s top adviser, said Feb. 2.
Ghadhban, a former oil minister, said Iraq’s capacity to produce crude will increase by 400,000 barrels a day this year to exceed 3 million barrels a day by the end of December. Production capacity will rise next year by an additional 500,000 barrels a day, and crude exports in 2013 will reach 2.6 million barrels a day, he said.
Iraq has awarded 15 licenses to foreign companies for drilling rights since the U.S.-led invasion that ousted President Saddam Hussein in 2003. The government plans to hold a new licensing round in May. The Arab nation is the third-largest oil producer in the Organization of Petroleum Exporting Countries, pumping 2.75 million barrels a day in January, according to data compiled by Bloomberg.
Iraq is waiting for Exxon Mobil Corp. to “take the right decision” and rescind a contract it signed with authorities in the country’s semi-autonomous Kurdish region, said al-Shahristani, the deputy prime minister. He called Exxon’s agreement with the Kurds illegal.
“The company knows very well the position of the Iraqi government, which remains unchanged,” al-Shahristani said.
Exxon, which has not commented publicly on the matter, operates with Royal Dutch Shell Plc in southern Iraq at the West Qurna field, one of the nation’s biggest.