Iraq Seeks to Boost Crude Exports to China as Oil Output Rises
Iraq is seeking a long-term accord to boost oil exports to China as OPEC’s second-biggest producer increases output from fields operated by companies such as Royal Dutch Shell Plc (RDSA), Oil Minister Abdul Kareem al-Luaibi said.
The Middle Eastern country’s crude exports to China average 500,000 barrels a day, Luaibi told reporters in Baghdad today. “We are looking forward for a long-term agreement to increase exports to China,” he said.
China is on course to overtake the U.S. as the world’s top crude importer in 2014 as the country’s growing refining capacity boosts demand, the Organization of Petroleum Exporting Countries said yesterday. Iraq’s oil production, which averaged 3.15 million barrels a day in the first quarter, will probably rise this year, mainly because of increasing output in the south of the country, Luaibi said.
The Majnoon field developed by Shell is due to boost production in May, he said, without giving a figure for the increase. The Gharraf field developed by Petroliam Nasional Bhd and Japan Petroleum Exploration Co. (1662) is due to start output in June, earlier than scheduled, he said.
Iraq exported 2.417 million barrels a day in March, Luaibi said, compared with 2.5 million barrels a day in February, according to the State Oil Marketing Organization website. Luaibi didn’t give a reason for the monthly decline.
Iraq has lost $2.4 billion in revenue since the self- governed Kurdish region in the country’s north halted shipments from their fields through the government-operated pipeline in December, Luaibi said. The Kurds aren’t meeting a commitment to export 250,000 barrels a day, as stipulated in the state budget, he said. Iraq is seeking to boost oil sales to rebuild the economy after decades of wars and sanctions.
Exxon Mobil Corp. (XOM), DNO International ASA (DNO) and Genel Energy Plc (GENL) are among companies caught in the conflict between the central government and the Kurds over oil-revenue sharing, production contracts and disputed land.
BP Plc (BP/) has offered to invest $100 million to carry out studies and technical surveys to develop fields in Kirkuk, Luaibi said today. The Kurdish authorities said Jan. 17 that the central government would be acting illegally if it proceeds with the plan to allow BP to develop disputed land in Kirkuk.
Iraq holds the world’s fifth-largest crude reserves, according to BP’s Statistical Review of World Energy. The nation is the biggest producer, after Saudi Arabia, in the Organization of Petroleum Exporting Countries.
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