Iraq will double exports within weeks from its northern Kirkuk oil fields and continue boosting output further south amid a global market glut that’s pushed prices to their lowest level in more than five and a half years.
Crude shipments will rise to 300,000 barrels a day from the Kirkuk oil hub, where authorities are also upgrading pipelines between fields, Fouad Hussein, a member of the Kirkuk provincial council’s oil and gas committee, said yesterday in a phone interview.
“There is a need to install a new pipeline network” to increase exports from the area, Hussein said. Kirkuk, which currently exports about 150,000 barrels a day, will boost shipments to 250,000 barrels a day and then to 300,000 “in the coming few weeks,” he said.
Iraq, holder of the world’s fifth-largest crude reserves, is rebuilding its energy industry after decades of wars and economic sanctions. The country exported 2.94 million barrels a day in December, the most since the 1980s, Oil Ministry spokesman Asim Jihad said Jan. 2. The exports, pumped mostly from fields in southern Iraq, included 5.579 million barrels from Kirkuk in that month, he said.
Oil tumbled almost 50 percent last year, the most since the 2008 financial crisis, amid a global crude supply surplus that the United Arab Emirates and Qatar estimate at 2 million barrels a day. Brent crude fell 0.9 percent to $48.26 a barrel at 8:17 a.m. in Dubai.
The central government of OPEC’s second-biggest producer reached an accord last month with authorities in the semi-autonomous Kurdish region over the Kurds’ oil exports through Turkey. The deal followed years of disagreement over Kurdish efforts to produce and sell energy resources independently of the central government in Baghdad. It includes shipments from Kirkuk, which Kurdish troops have controlled since repelling an offensive by militants from the Islamic State in June.
Iraq’s Oil Ministry is adding pipelines to connect oil fields in Kirkuk and linking them with the Kurdish region’s export pipeline to Turkey, Hussein said.
State-owned Missan Oil Co. plans to boost its production to 1 million barrels a day in 2017 from an average output of 257,000 barrels a day in 2014, according to an e-mailed statement from Director-General Adnan Sajet. Output exceeded 93 million barrels in 2014, up 10 million barrels from the previous year, he said yesterday.
Iraq’s government also awarded a contract to an unspecified international company to more than double the capacity of the southern Basra oil refinery to 300,000 barrels a day, according to an e-mailed statement from the office of Deputy Prime Minister Rowsch Nuri Shaways. The refinery can currently process about 140,000 barrels a day, according to data compiled by Bloomberg.