Page 7 - MEOG Week 25 2022

MEOG POLICY & SECURITY MEOG

Allawi casts doubt on

Iraq’s longer-term oil target

IRAQ IRAQ has been responsible for much of the Terminal (KAAOT) caused the terminal to go
doubt cast over its own plans to increase oil pro- offline in 2017 and only return to operations
duction capacity. Further uncertainty came this briefly in the intervening period. An affiliate of
week in the form of an interview with Deputy the Iraqi National Oil Co. (INOC) has hired a
Prime Minister Ali Allawi, carried by Energy contractor to find and repair the fault, while a
Intelligence. third pipe is to be installed, aiming to resume
Oil Minister Ihsan Abdul Jabbar has given exports from KAAOT’s SPMs by the end of 2023.
varying numbers for the country’s capacity, the When operations resume, the terminal is antic-
latest of these pegging it at 4.9mn barrels per day ipated to operate at around 400,000 bpd, down
(bpd). He has talked up the possibility of reach- from its 600,000 bpd capacity prior to going
ing 8mn bpd by 2027; however, the Ministry of offline.
Oil (MoO) last month noted figures of 6mn bpd Basra Oil Co. (BOC) said in March that the
by 2027 and 8mn bpd by 2028, then said last pipeline overhaul is part of efforts to increase
week that he hoped for 8mn bpd by 2027. Allawi, crude export capacity from the southern ports
who is also Iraq’s Finance Minister, said that he to 6mn bpd by 2026. This will include the lay-
thought the 6mn bpd figure was more ‘realistic’. ing of two 48-inch (1,066-mm) pipelines as well
He highlighted severe export constraints as as the construction and installation of new sin-
the key obstacle to expanding capacity, describ- gle-point mooring (SPM) facilities, with BOC
ing the subsea pipelines that link to Al-Basrah preparing a tender worth around $1bn that will
Oil Terminal’s (ABOT) offshore single-point be opened up to international companies.
moorings (SPMs) as old, costly and a “very, very While the export constraints highlighted by
sensitive element of our export capacity”. ABOT Allawi are certainly a clear and present chal-
has a current capacity of 3.5mn bpd, which Iraq lenge, issues with the availability of water that
uses almost in its entirety. can be used in oil production may prove to be
Allawi said during the Iraq Energy Forum in the higher hurdle. As has been discussed at great
Baghdad: “I don’t think we’ll be expanding our length, much will depend on the eventual suc-
capacity beyond … another 1mn bpd within five cess or otherwise of the long-awaited Common
years.” He later clarified that the 6mn bpd figure Seawater Supply Facility (CSSF) now included
was what he thought was “realistically” achieva- in the broad deal with TotalEnergies agreed last
ble by Iraq during that timeframe. year. In its current form, this envisages the sup-
The sensitivity of the export pipelines has ply of 5mn bpd of treated seawater to a group
been felt even more sharply since ruptures in of southern supergiant oilfields that account for
the two lines running to the Khor al-Amaya Oil much of Iraq’s oil output.™

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