Iraq Explores Global Crude Storage with Exxon
Iraq’s state oil marketing firm is in discussions with Exxon for potential crude storage sites close to demand markets in Asia, the United States, and Europe, Bloomberg reports, citing a senior Iraqi executive.
“We, as SOMO, are in need to create a stable market for Iraqi crude oil, and to have good strategic storage for Iraqi crude oil and oil products in future as well,” Ali Nizar, the director general of the Iraqi state oil marketing company, SOMO, said.
Iraq plans to use storage sites in Singapore and “wherever there is an opportunity to target major markets including Asian market and European market,” the executive said, as carried by Bloomberg.
SOMO is considering whether to use existing storage sites or to take part in building new storage facilities close to its demand markets, according to Nizar.
Iraq, OPEC’s second-largest oil producer, and other major oil-producing nations in the Gulf have been looking to have overseas storage in recent years.
For example, Abu Dhabi National Oil Company (ADNOC) of the United Arab Emirates has been using and storing petroleum at the existing crude storage sites in India, the world’s third-largest crude oil importer.
The recent geopolitical flare-ups and the threat to key shipping lanes in the Middle East, including the critical Strait of Hormuz, have prompted Middle Eastern producers to seek to have at least some supply stored outside the region to hedge against potential disruption.
Iraq is also looking to boost its oil production in the medium term, under a $25-billion deal with BP to redevelop Kirkuk fields.
The wider resource opportunity across the contract and surrounding area is believed to include up to 20 billion barrels of oil equivalent, according to the British supermajor.
For Iraq, the agreement is aligned with its plan to raise its oil production capacity to above 6 million barrels per day (bpd) by 2029, up from about 4.5 million bpd now.
By Tsvetana Paraskova for Oilprice.com
Kurdistan Has Lost $28 Billion From Its Oil Dispute
Kurdistan has lost some $28 billion from a dispute between the government of the semi-autonomous region, the central Iraqi government, and Turkey that has been running for over two years now.
“From March 25, 2023, until now, Iraq and the Kurdistan Region have suffered losses of more than 28bn dollars due to the halt in oil exports,” Safin Dizayee, who is the head of foreign relations at the Kurdistan Regional Government, told media this week.
Oil exports from Kurdistan have now been halted for two and a half years, after they were shut in in March 2023 due to a dispute over who should authorize the Kurdish exports. Despite some breakthroughs in negotiations in recent months, the disagreements have continued. Before the halt to exports, oil supply from Kurdistan averaged more than 400,000 barrels per day.
The dispute showed some signs of progress earlier this year, with Baghdad and Ankara reaching an agreement on some major points. A final agreement between the Kurdistan government and the central Iraqi government in Baghdad, however, is yet to be achieved. Meanwhile, the situation is causing security concerns for the Kurdish government, Dizayee also said.
In July, drone attacks on oil fields operated by U.S. companies shut in some 200,000 barrels daily in production. No group claimed responsibility, but the incidents marked the most serious disruption in the region since April.
The dispute between Erbil and Baghdad concerns the link between revenues from oil exports from the semi-autonomous region and public servant salaries.
Prior to the March 2023 halt, the Kurdistan Region was exporting approximately 400,000 barrels per day of crude through the Iraq-Turkey pipeline to Ceyhan. These volumes accounted for over 10 percent of Iraq’s total oil exports and were a critical revenue stream for the Kurdistan Regional Government.
By Charles Kennedy for Oilprice.com
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