Iraq to upgrade southern oil output capacity in 2019: Basra Oil Co

BASRA (Reuters) - Iraq plans to raise output from its southern Majnoon oilfield to 290,000 barrels per day (bpd) by the end of 2019 and to 450,000 bpd by the end of 2021 from a current 240,000 bpd, the director of the Basra Oil Company said.

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Ihsan Abdul Jabbar, in an interview with Reuters late on Friday, said Iraq’s southern oil exports were a little below 3.6 million bpd so far in January after hitting a record high of 3.63 million bpd in December.

Iraq, OPEC’s second-largest producer, is producing below its maximum capacity of nearly 5 million bpd in line with an agreement among members of the Organization of the Petroleum Exporting Countries and other exporters, such as Russia, to curtail global supply in order to support prices.

Baghdad is still aiming to increase that capacity, however, especially from its southern fields, where exports account for around 95 percent of state revenue.

Iraq’s oil exports averaged 3.726 million barrels per day (bpd) in December, an increase from the previous month.

Abdul Jabbar said Hyundai Engineering was the front runner to win a tender to build a vital water injection project in southern Iraq.

Basra Oil Co began preparing to tender for the project in February last year if talks with Exxon Mobil failed, the head of the oil ministry’s licensing and contracts office said at the time. The oil ministry received bids from three foreign contractors for the project, the oil minister said in November.

Iraq is also planning to operate a new offshore oil export pipeline with a capacity to transport 700,000 bpd by the end of 2019, Abdul Jabbar said.

Iraq had approved an investment budget of around $7 billion for 2019 to develop five giant oilfields in the Basra region, he said. Around $700 million would go towards development of the Majnoon field.

A deal was agreed with U.S. company Schlumberger Ltd to drill 40 wells at Majnoon, the oil ministry said last month.

Reporting by Aref Mohammed; Writing by Ahmed Rasheed, John Davison; Editing by Louise Heavens and Elaine Hardcastle