Iraq: Bad October weather sees record-breaking November exports - 09 Dec 2015

Oil exports for November rose to a record high of 3.37 million barrels per day (bpd), up from 2.7 million bpd the previous month according to the Oil Ministry release.


The average price per barrel was $36.42, bringing in $3.67 billion for the month.


The jump was a result of oil held in storage in October as a result of poor weather in Basra. The country is unlikely to sustain similar high levels of exports for the next few months.


The surge helped the Organisation of the Petroleum Exporting Countries (OPEC) supply to rise to 31.77 million bpd from 31.64 million in October. 


Iraq is planning to produce up to 6 million bpd by 2020.


Meanwhile the KRG exported 18 million barrels of crude, an average of 600,800 bpd in November, independently of Baghdad through the port of Ceyhan. The pipeline faced two days of downtime due to sabotage and theft in Turkey. 


More than 13 million barrels came from the fields operated by the KRG, while close to 5 million barrels came from the oil fields of Kirkuk operated by state-owned North Oil Company (NOC).


‘In November, the KRG continued to increase its direct oil sales in Ceyhan to compensate the Region for the budget shortfalls from the federal government in Baghdad,” read the statement published on the Ministry of Natural Resources (MNR) website. 


The KRG maintains that it will continue to work with the federal government “to reach a clear and mutually beneficial understanding on all issues related to the oil export during 2016 and normalisation of the relationship over the 2016 budget”.


The KRG authorised the release of another round of payments to the international oil companies (IOC) operating in its three provinces. The amount for the latest tranche has yet to be announced, but in September this year the KRG set aside $75 million for the payments. 


“The KRG continues to adhere to its payment policy to allow for the exporting companies to cover their ongoing costs and maintain production,” read the statement posted on the Ministry of Natural Resources (MNR) website. 


The amount of monthly payments will “improve” once exports rise or oil prices recover added the statement. 


In a conference held in London last week, MNR minister Ashti Hawrami said that the KRG is committed to honouring all terms and conditions of the production-sharing contracts with IOCs. 


“We are continuing regular payments to IOCs to cover their costs and help them reinvest,” he said. 


Meanwhile deputy prime minister Qubad Talabany conveyed his appreciation for the “patience of our IOC partners and we will repay that faith with continued determination to meet our financial obligations”.


Genel Energy said it is owned $409 million as of end-September, while DNO is owed close to $1 billion and Gulf Keystone Petroleum is owed $238 million.



Iraq Energy Institute