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Iraq Seeks to Increase Oil Export Capacity, But Pledges to Comply with OPEC Deal

Iraq Seeks to Increase Oil Export Capacity, But Pledges to Comply with OPEC Deal

Tuesday, 30 January, 2018 - 11:30
Iraqi Oil Minister Jabar al-Luaibi attends the opening ceremony for a new gas plant at Badra oilfield in Kut province, Iraq December 6, 2017. REUTERS/Thaier Al-Sudani

Iraq will comply with the OPEC-led deal on reducing output even though Baghdad is working hard to increase its oil export capacity from the north and south of the country, Iraqi Oil Minister Jabar al-Luaibi said on Monday.

Luaibi told a conference in London that Iraq’s export capacity was nearing 5 million barrels per day (bpd), including 4.6 million bpd from the south. Iraq has had to limit output in line with OPEC’s commitment to cut output by about 1.2 million barrels per day (bpd) as part of a deal with Russia and others.

“Iraq has made it clear at every time and every event that Iraq will comply with OPEC declarations in good spirit, genuine spirit,” the minister said.

Reuters reported that Iraq state-oil marketer SOMO plans to export 2.9 million barrels per day from Basra light crude oil in February. It is also expected to issue one million barrels per day of heavy crude oil.

The average of the month is to range between 3.500 million bpd and 3.550 million bpd, SOMO’s acting director general Alaa al-Yasiri said on Monday.

He added to reporters that SOMO’s recent export rate increase is due to a drop in local consumption.

On its website, the Iraqi Oil Ministry revealed on Monday that Iraq plans to build an oil refinery at the port of Fao on the Gulf with two Chinese companies, and is seeking investors to build three more. The refinery in Fao will have a 300,000 barrel-per-day capacity and include a petrochemical plant.

Two other refineries, each with a 150,000-bpd capacity, are planned in Nasiriya, southern Iraq, and in the western Anbar province. A third, with a 100,000-bpd capacity, is planned in Qayara, near Mosul, the northern Iraqi city, which was taken back from ISIS last year.

Iraq is OPEC’s second-largest oil producer, after Saudi Arabia. Its refining capacity was curtailed when ISIS overran its largest oil processing plant in Baiji, north of Baghdad, in 2014.

Iraqi forces recaptured Baiji in 2015, but the facility sustained heavy damage in the fighting. The country now relies on the Doura refinery in Baghdad and Shuaiba plant in the south.

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