Cabinet suspends approval of major oil export expansion
Political scrutiny of a contract is delaying a subsea pipeline project with the potential to lift export capacity by 500,000 bpd in a year.
Iraq's Cabinet has withdrawn funding approval for a major infrastructure upgrade that would have enabled Iraq to increase southern crude export capacity by half a million barrels per day in just over a year.
In a statement released after its June 20 meeting, the Cabinet said it had “suspended the implementation" of the authorization it granted less than a month ago to approve $417 million funding for the Sealine 3 project, to be led by the Dutch firm Boskalis and the state-run Basra Oil Company (BOC).
That approval had been seen as a major step toward easing infrastructure bottlenecks that are currently constraining Iraq's production capacity and revenue potential. A government spokesperson said that the Cabinet's reversal was based on the emergence of “new data” that necessitated more scrutiny.
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