January 23, 2012 / 3:21 PM / 7 years ago

UPDATE 1-Iraq targets 2012 500,000 bpd oil output increase

By Michael Kahn and Jason Hovet

PRAGUE, Jan 23 (Reuters) - Iraq is targeting an increase in oil production and exports of 500,000 barrels per day for 2012 and even more of a gain in 2013, its top oil official said on Monday, signalling substantial growth under its ambitious expansion plan.

Speaking to Reuters on the sidelines of a Czech-Iraqi business conference, Deputy Prime Minister for Energy Hussain al-Shahristani also said Baghdad plans to hold final talks with Exxon Mobil over the company’s oil exploration deal with the semi-autonomous Kurdistan government.

“We have added about half million barrels per day in 2011 for production and export, and there will be an additional half a million barrels per day or slightly more in 2012, and even a higher increment in 2013,” Shahristani told Reuters.

Iraq’s production last year averaged roughly 2.7 million bpd, allowing for exports of roughly 2.2 million bpd. Shahristani said production was now at about 3 million bpd.

Last week, a senior Iraqi oil industry source said the country aimed to boost oil exports by up to 400,000 barrels per day over the next two months as it opens the taps at a new Gulf outlet, signalling the world’s biggest capacity expansion this year.

Now in year three of a bold oil development programme, Baghdad finally may be able to export all the extra oil extracted from its supergiant fields by foreign oil companies.

Widely flagged export constraints and infrastructure bottlenecks have kept some new oil in the ground and left southern exports running at around 1.7 million bpd for much of last year.

“Now we are producing 3 million barrels per day,” Shahristani said. “As soon as we operate our new export terminal on the 27th of January, we will be able to increase production further. Now we have the capacity to produce, but we cannot move it to the export terminal.”

Shahristani also said Iraq was considering its options concerning Exxon after the oil major signed a deal with the Kurdistan Regional Government in mid-October for six exploration blocks.

That deal made Exxon the first major to push into the northern Kurdish region but angered the Arab-dominated central government in Baghdad, which is locked in a feud with the KRG over territory and oil rights.

The move prompted Baghdad to consider taking action against the company. Exxon also is leading development of the supergiant West Qurna-1 oil field in southern Iraq.

“Iraq is considering its actions and will inform the company before we make any public announcements,” Shahristani said.

“The minister of oil has been in touch with them, and they are going to come to the ministry of oil for a final round of discussion, and the ministry will make its announcement and you’ll hear about it when they make it.”

The U.S. major has not commented publicly on the agreement, and Iraqi oil officials say the company has not responded to their requests for an explanation.

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