* Little, if any, oil export growth up to June
* Pipeline pump problem at export facilities in south
* Competitive pricing lures buyers
By Peg Mackey
LONDON, April 11 Pipeline bottlenecks at Iraq's
southern ports are preventing OPEC's second-biggest producer
from increasing oil exports, even while it offers competitive
pricing that is attracting rising demand.
Regional rivals including OPEC heavyweight Saudi Arabia were
unnerved in December when Baghdad announced a 2013 export target
of 2.9 million barrels per day (bpd), up 500,000 bpd from last
But the gains have yet to materialise.
Bad weather was blamed at the start of the year, but now
logistical issues are likely to keep exports close to 2.4
million bpd - the average for 2012 - through the first half of
this year, Iraqi and Western oil industry sources say.
"Material growth will not happen quickly," said a senior
Western oil executive from a company operating in southern Iraq.
Iraq is increasingly concentrating on selling its crude oil
to Asia, undercutting its regional competitors.
Buyers of Basra Light crude, which accounts for nearly 90
percent of Iraq's exports, asked for 2.8 million bpd in May -
the highest ever level, a senior Iraqi oil official said,
although only 2 million bpd has been allocated.
"The main problem is with logistics. There are limitations
on the pumping capacity to the southern export facilities. But
this will be resolved," the official said.
"There is huge demand for our oil. Some customers are trying
to avoid Iran and buy from us instead."
Asian buyers of Iran's crude have cut back sharply as tough
Western sanctions on Tehran over its nuclear programme make it
increasingly difficult to pay for and ship the oil.
After stagnating for decades due to wars and sanctions,
Iraq's oil output and exports began to rise in earnest in 2010
after Baghdad secured service contracts with companies such as
BP, Royal Dutch Shell, Eni and Exxon
Swift gains at Iraq's giant southern oilfields increased
supply by 600,000 bpd over the past two years, making Iraq the
world's fastest growing oil exporter.
Work continues apace. Initial flows at Majnoon, operated by
Shell, are expected to hit 100,000 bpd next month, but Western
oil executives say Iraq's lofty export goal of 2.9 million bpd
may not be met until the fourth quarter.
Production in the first quarter was just above 3 million
bpd, allowing for exports of 2.4 million bpd, which generated
more than $20 billion.
To facilitate its rising supply, Iraq expanded export
capacity in the Gulf last year by installing two offshore
floating terminals. But it's still fitting subsea pipelines and
loading pumps for optimal use of the capacity.
Storage is also a constraint: there is only space for 6.5
million barrels of crude.
Furthermore, Kirkuk crude from Iraq's northern oilfields
accounted for about 300,000 bpd of the export total. The
autonomous Kurdistan Regional Government (KRG) is due to
contribute 250,000 bpd to Iraq's overall exports.
But a payment dispute between the KRG and Baghdad has kept
shipments of over 100,000 bpd on hold since December. The halt,
if prolonged, will frustrate Iraq's plan to increase exports.
These hurdles suggest Iraq's production and exports are
likely to grow by an average 200,000 to 300,000 bpd this year,
Western and Iraqi oil experts say.