Iraq, OPEC’s second-largest oil producer, will be able to increase exports to 250,000 barrels per day (b / d) from the second quarter after completing the installation of pumping stations in its Gulf ports, an Iraqi oil source said.
The upgrade work explains why Iraq, which has long exceeded its OPEC production quota, has improved on meeting production targets over the past year, the source said. Improvements would have prevented the country from pumping larger volumes.
The Iraqi National Petroleum Marketing Organization (SOMO) had exported up to 3.7 million barrels per day from its ports in southern Basra, but the need to rehabilitate aging export infrastructure has forced Iraq to reduce its exports to the south when modernization work started from May 2020.
The drop in oil prices caused by the pandemic and strict Iraqi regulations resulted in delays in the projects, which were managed by the state-owned Basra Oil Co (BOC).
Work to install new pumping stations to increase Basra’s export capacity took place for most of 2021, an Iraqi oil ministry source told Reuters.
Their start-up will increase Basra’s operational crude export capacity to 3.40 million-3.45 million barrels per day from the current 3.20 million barrels per day, with a target date for the second quarter, the report said. source.
INCREASED OPEC + COMPLIANCE
The upgrade work coincided with efforts to improve Iraq’s compliance with OPEC + production cuts, the source said.
Iraq pledged in the second half of 2020 to strengthen compliance and compensate for previous overproduction after facing pressure from other OPEC + members. Membership increased in 2021 to an average of 97%, according to Reuters calculations based on OPEC figures.
Iraq’s compliance on the rise
Iraqi crude exports from Basra were close to reaching operational capacity in November and December last year at 3.195 million bpd and 3.180 million bpd respectively, according to SOMO figures seen by Reuters.
The modernization work will allow Iraq to increase its exports as its OPEC + quota increases, the Oil Ministry source said. It plans to increase the South’s export capacity to 6 million barrels per day by 2025.
BOC also plans to complete maintenance operations to restore crude loading operations at the port of Khor al-Amaya by the end of 2022, with an initial capacity of 400,000 bpd.
Source: Reuters (Additional reporting by Ahmed Rasheed; Editing by Alex Lawler and Jan Harvey)