Iraq is facing problems in the quality of oil

Iraq is facing problems in the quality of oil


Iraq is facing problems in the quality of oilCapitals (Reuters) – coincided Iraq’s efforts to pump more oil to Asia with complaints from some buyers about the quality of Iraqi crude, which casts doubt on the ability of Baghdad to increase the supply of Basra Light crude to the region by a third in 2014. Iraq has managed to overcome problems in supply caused a reduction in exports of Basra Light crude oil terminals in the south of the country last year.

And rising production contributed to rein in oil prices, which increased due to political tensions erupted recently and supply disruptions in Libya and northern Iraq and some other regions. But since December complained three buyers in North Asia, including oil intergovernmental two companies in China, the high proportion of water in Basra, which may reflect the need for further modernization of the oil infrastructure in Iraq, but was forced to slow down the loading rate again. He said one of the buyers, who requested anonymity because it was not authorized to speak to the media, “in fact, higher production, but the time required to separate the sediment and water is not enough … All they do is transfer their problems to us.”

Buyers said that the three water ratio ranged between 0.3 and one percent in several shipments each with a volume of two million barrels, which is causing losses of up to three million dollars for each shipment on the assumption that the price of crude to $ 100 a barrel. Buyers and request compensation in the price of Iraqi oil marketing company of government, but they said they did not receive any response to their requests. It can accept most of the refineries, the proportion of water of up to 1.0 percent. Usually these companies leave crude that contains a high percentage of water in the tanks to allow time to separate the questioners and get rid of the water. Was not immediately clear why the high proportion of water in some shipments of Basra Light crude since December despite the fact that Iraq is working on the launch of new oil fields to enhance production. The official said the state-run South Oil Company, which oversees the production of Basra Light crude, he will have further updates to the oil processing facilities to solve this problem. The official added that the existing treatment plants for raw product from the southern oil fields in Iraq are designed to address the oil dry and not mixed with water. The water problem appeared before the start of the arrival of southern Iraq’s exports to new highs after years of continued struggle to meet the obligations of supply despite harbors obsolete and inadequate storage capacity. Exports of Basra Light crude to the highest level in 35 years in February, while the 2.5 million barrels per day, up about a quarter from the previous month before they recorded a slight decline in March. It is expected that exports recovering the southern ports in April to exceed 2.5 million barrels per day.

The company began Russia’s Lukoil commercial production of one of the largest untapped oil fields in the world at the end of March with the goal of approaching Baghdad from the production of this year’s four million barrels per day. It is expected that the production of the West Qurna field, which produces giant -2 Basra Light crude to 1.2 million barrels per day, in the end, up from 120 thousand barrels in the beginning. The development work due for completion in the ports of southern oil later this year and operation of units of new production that allows for Iraq Shipping more oil may be able to fulfill the obligations of the contract by up to 2.8 million barrels per day of Basra Light crude in the second half of 2014. Signed buyers Asians, led by China and India, annual contracts to buy about 60 percent of the exports of Basra crude this year, almost all of the increase in the production of Iraq in 2014 under the lure of competitive price set by the oil marketing company of the ore. But with the advent of the water problem and a slowdown in the rate of loading in some cases, Iraq faces the risk of vibration reputation acquired over the past few years.