March 22, 2012 / 10:56 AM / 8 years ago

UPDATE 2-Iraq denies technical fault in new oil terminal

* Oil Min Luaibi says weather to blame for interruption

* Iraq signs $1 bln oilfield service deal with Samsung

* Iraq still considering whether to lift ban on Exxon -Luaibi

By Aseel Kami

BAGHDAD, March 22 (Reuters) - Iraq said on Thursday that weather, rather than a technical fault, was behind an interruption in the operation of a new offshore oil terminal designed to ramp up its exports and that a second tanker was about to begin loading there.

The new single point mooring (SPM) terminal came online on March 8 and loaded a tanker with 2 million barrels of oil by March 13 but has not operated since.

Sources at the state-owned South Oil Company had blamed technical faults for the interruption, but Oil Minister Abdul Kareem Luaibi said that weather was to blame after storms hit the Gulf.

“As we speak, a second vessel is on its way to the SPM, with a capacity of 2 million barrels,” Luaibi said.

Iraq, which has some of the world’s biggest oil reserves, has sweeping plans to increase its oil output and exports, which have been held back by a lack of loading infrastructure in the Gulf.

Luaibi said he hoped average daily oil exports would exceed 2.2 million barrels in March even though the poor weather hurt loading at its Gulf ports.

The new terminal is the first of four being built by Australia’s Leighton Holdings with the aim to eventually more than double Iraq’s exports by adding 3.4 million barrels per day of total additional capacity.


On Thursday, Iraq inked a $1 billion oilfield service contract with South Korea’s Samsung Engineering for its West Qurna-2 oilfield, part of an initial development plan to start production of the field in the south.

An official with Iraq’s state-owned North Oil Co., which has a 25 percent share in West Qurna-2, said output from its northern oilfields was expected to hit 900,000-1 million barrels per day (bpd) within three to four years.

Production at the southern oilfields, run by the state South Oil Co., is seen hitting 6 million bpd in the next three years, said an official from the company, who also attended the signing ceremony with Samsung.

The new SPM terminal’s initial operation was delayed for several weeks by poor weather. Iraqi officials say the second SPM terminal should be ready in April.

Iraq is also investigating whether there was any wrongdoing involved in Leighton’s bid for the project after the firm told Australian police one of its subsidiaries may have been involved in bribery. Leighton is cooperating with investigators.

Luaibi said Iraq was still considering whether to lift a ban on bidding by Exxon Mobil on new oil contracts, imposed because of its dealings with the autonomous Kurdish region.

Oil major Exxon last year announced a Kurdish exploration deal, angering Baghdad, which considers deals with the Kurdish region to be illegal.

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