Iraq Oil Report

Plus:
*Shell and South Gas Company to team up on joint venture
*Turkey and Syria eyeing Akkas gas field

More of Iraq’s oil has seen the light of day and exports have realized post-invasion records as measures to stem attacks and other interference have proved successful along the key northern pipeline system.

Some who used to target the pipeline — especially on the link from Baiji north through hot Sunni Arab insurgent territory and to Turkey — are now paid to protect it, though long-term success is far from guaranteed.

“The export pipeline was under attack constantly last year this time,” Oil Minister Hussain Shahristani told United Press International’s Ben Lando during an interview in his Baghdad office. …

Overall oil production averaged 2.55 million bpd in May, “and we’ll keep on adding to it toward the end of the year,” Shahristani said. “We are planning to reach 2.8 (million) to 2.9 million bpd.”

Iraq’s south has more oil reserves, production and exports, and it has been less frequented by attacks. It’s humming at 1.92 million bpd in production, he said, while northern flow has increased to 630,000 bpd. Domestic consumption is at “about half a million barrels a day,” Shahristani said, with the rest sent to market via pipeline.

Although they hit 450,000 bpd in May, the pipelines from the Kirkuk fields in Iraq’s north to the refinery of Baiji and then onto the Turkish port of Ceyhan were offline more often than not since 2003. Saboteurs were either sparking explosions as they tapped into the system or, more often, launching attacks on workers and infrastructure as part of their campaign.

There have been at least 779 attacks on pipelines from March 2003 through May 15, 2008, according to an expert in threats and vulnerabilities to the energy sector worldwide, who spoke to UPI on condition of anonymity.

Refineries have sustained 585 attacks, 569 on tanker trucks, six on maritime tankers and 47 attacks at the oil fields. And 767 workers have been killed, wounded or kidnapped.

More incidents have likely occurred but have gone unreported, the expert said.

This is true for the electricity sector as well, including 1,285 workers who met the same fate as their oil colleagues. …

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Shell and Iraq’s South Gas Company are nearing a deal on a joint venture to develop the massive gas reserves in the south of the country, Perry Williams reports for the Middle East Economic Digest. Shell has submitted a gas master plan to harness the massive reserves and mostly wasted gas produced – and like oil there’s likely plenty more to be found. Shell is also attempting a deal to develop the Akkas gas field.

Turkey’s energy minister also said on Friday, that Turkey has been talking to Syria and Iraq to extract natural gas from Iraq’s Akkas fields, Hurriyet reports. “We are planning to carry Iraqi gas through a pipeline right next to the Kirkuk-Yumurtalik oil pipeline. We are holding tri-lateral negotiations with Syria and Iraq to extract and use gas in the Akkas fields, and we hope our talks would yield a positive result,” Guler told a Turkish-Arab economic forum in Istanbul on Friday.

This is a relatively new option being pushed for the Akkas gas field. It’s along the Syrian border, and the export option discussed has been directly to Syria for domestic consumption and then transit north in the Arab Gas Pipeline. Taking it through western Iraq and up to Turkey would be more expensive, require more security and is likely not going to happen.

Turkey’s direct-from-Iraq gas negotiations have been centered more on the Iraqi Kurdistan potential gas reserves, which would have an easier time being sent in a new pipeline alongside the Kirkuk-Ceyhan oil lines. However, exports must compete from a very large and growing domestic demand for Iraq’s gas to stay in country.
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