June 17 (Reuters) - Iraq’s oil exports, confined to its southern terminals, have not so far been affected by escalating violence in the north, where an export pipeline has been out of action since March.
Militants from the Islamic State in Iraq and the Levant (ISIL) overran the- northern city of Mosul last week. Scores of Iraqis were killed on Tuesday during a battle for a provincial capital, Baquba, and fighting shut the Baiji oil refinery, Iraq’s largest.
Iraq has been expanding oil production in the south since Western companies signed a series of service contracts with Baghdad in 2010.
Exports from Iraq’s southern terminals reached 2.58 million barrels per day (bpd) in May, the oil ministry said, the highest since at least 2003.
Iraq’s oil minister, Abdul Kareem Luaibi, said on the sidelines of an OPEC meeting in Vienna last week that exports were running at an even higher rate of 2.705 million bpd, solely from the south.
But Iraq’s northern exports of 300,000 bpd have been shut since early March due to attacks on the pipeline to Turkey.
Key oil fields include Rumaila, West Qurna-1 and Zubair. The giant West Qurna-2 field began commercial production in March.
Almost all Western oil majors work with Baghdad on joint projects including Exxon Mobil, BP, Royal Dutch Shell, ENI, Russia’s Gazprom Neft, Lukoil and Chinese firms.
BP said it had sent non-essential staff in Iraq home and its operations there have not so far been affected. Lukoil and Gazprom said the fields they operate in Iraq are distant from the fighting and there is no need to fear disruption to output.
Iraq’s three southern export outlets are the Basrah Oil Terminal, its Single Point Moorings and the Khor al Amaya terminal. Basrah is the largest, exporting almost 1.4 million bpd in May, according to shipping data. The SPMs provided another 1.1 million bpd while the smallest outlet, Khor al Amaya, shipped three 700,000-barrel cargoes.
The Kirkuk oilfield is the basis of Iraq’s northern production. Kirkuk is connected to world markets by pipeline to Turkey’s port of Ceyhan. Exports have been shut since early March due to attacks on the pipeline.
Iraqi Kurdish forces took advantage of the chaos to take control of the oil hub of Kirkuk as the troops of the Shi‘ite-led government abandoned posts, alarming Baghdad’s allies both in the West and in neighbouring Shi‘ite regional power Iran.
Although the pipeline from Kirkuk has been shut since March, Kurdistan has been exporting some of its own oil output by truck and via a new pipeline to Turkey, despite pressure from Baghdad on buyers not to touch that oil.
Baghdad believes its state oil firm is the sole company which can export crude from Kurdistan.
Kurdistan will load two more tankers at Ceyhan with oil exported independently of Baghdad this week via pipeline, the region’s minister of natural resources, Ashti Hawrami, said on Tuesday. The region has already exported two shipments, he said. (Compiled by Alex Lawler; Editing by William Hardy)