By Neela Banerjee
New York Times
23 June 2003
KIRKUK, Iraq, June 22 — The first Iraqi oil to be exported since the end of the war was loaded today onto a tanker in the Turkish Mediterranean port of Ceyhan, but a steady flow of oil from Iraq to world markets appears to be at least two weeks away, because of the severe looting of oil facilities, Iraqi oil officials said.
The oil exported today was part of eight million barrels that had been shipped from the vast northern Kirkuk field to storage terminals in Ceyhan during the war. The oil could not be sold because the United Nations oil-for-food program, which regulated Iraqi oil exports under sanctions, was suspended on the eve of the war.
On June 12, Iraq's State Oil Marketing Organization said six major oil companies, including the French concern TotalFinaElf and the American company ChevronTexaco, had won the right to buy the oil in Ceyhan and another approximately two million barrels that had been stored in the Iraqi Persian Gulf port of Mina al-Bakr.
In Ceyhan, one million barrels of oil were loaded on a tanker for the Turkish refiner Tupras this morning, and another million barrels were shipped to the Spanish refiner Cepsa in the afternoon, The Associated Press reported. The oil from Mina al-Bakr will be sent to ChevronTexaco in the coming weeks.
"Today, you have the oil stock in Ceyhan being exported," said Muhammad Hussain, director of operations of the Northern Oil Company, which produces oil from the Kirkuk fields. "But there's not any oil pumping from Kirkuk to Ceyhan."
For weeks after the war, the Bush administration reassured oil markets that Iraqi oil fields were unscathed by the fighting. The American-appointed interim management of the Oil Ministry in Baghdad had predicted that by mid-June, oil production would reach 1.4 million barrels a day, most intended for export.
But the looting that followed the war and continues even now in Kirkuk and in the fields and facilities in Basra to the south has proven so vexing that Iraqi oil production, after jumping sharply about three weeks ago, has since leveled off at roughly 800,000 barrels a day.
The industry also appears to have been the target of sabotage over the last two weeks. Two export pipelines from Kirkuk to Turkey were ruptured by explosives within days of each another, the first attack coming the day the contracts for renewed exports from Ceyhan and Mina al-Bakr were announced. Today, an explosion occurred on a pipeline owned by the South Oil Company outside the town of Hit, about 100 miles northwest of Baghdad. Officials at South Oil could not be reached for comment.
Thamir Ghadhban, the interim chief executive of the Iraqi Oil Ministry, said over the weekend that oil exports would probably resume next month and that more than $1 billion and about 18 months would be needed for Iraq to return to its prewar oil production of about three million barrels a day, Reuters reported. Mr. Ghadhban had said before that Iraq would reach its earlier output by the end of this year.
Adel Qazzaz, the director general of Northern Oil, views the damage to the pipelines from sabotage as a major nuisance. He said the most optimistic projection was that it would take about another week to repair both lines, which would not hamper the export effort. The real barrier to raising production and exports, he and others at Northern Oil said, was the lingering devastation from looting.
Northern Oil has pumped about 550,000 barrels a day for several weeks now. Of the petroleum it is now producing, Northern Oil could export about 300,000 barrels a day, Mr. Qazzaz said. Before the war, it produced about 800,000 barrels, of which 500,000 barrels a day was exported, he said.
Mr. Qazzaz said he expected to stay at the current level "for the next month or two." That is how long it may take for the company, with the help of the United States Army Corps of Engineers and Halliburton, the energy services company, to refurbish three production facilities that were looted.
Mr. Hussain said exports could also be limited because the communications network that allowed the company to manage its pipeline network had been ransacked. "Unless we fix it," he said, "we are not capable of exporting."
The company has hired a security company with 800 guards to protect its facilities. But the Americans and the Iraqis concede that looting, albeit on a smaller scale, still occurred daily.
----------------------------------------------------
Citation: Neela Bannerjee, "Barrels of Iraqi Oil Exported for the First Time Since the War," New York Times, 23 June 2003.
Original URL: http://www.nytimes.com/2003/06/23/international/worldspecial/23OIL.html?ei=1&en=fec17deca18adf8c&ex=1057390361&pagewanted=print&position=
--------------------------------------------------