Iraqi oil output plunged in December: report
Iraq's oil production dropped to 1.2 million barrels per day (bpd) in December as a dispute with the United Nations over pricing continued, the Middle East Economic Survey (MEES) reported Monday.
Exports under the UN oil-for-food program averaged 600,000 bpd as did production for domestic consumption and cross-border trade with Jordan, the weekly said.
MEES said indications were that exports "will continue at a minimum rate with a substantial decline in Iraqi oil exports for two successive months".
In November, output was 2.70 million bpd and three million bpd in October when exports amounted to 2.36 million bpd.
The UN sanctions committee in December rejected a new formula proposed by Iraq for the pricing of its crude amid controversy over Baghdad's efforts to impose a surcharge to be paid outside UN control.
"It is not clear why the Iraqis imposed the surcharge when they were well aware that it would be opposed by the Security Council and the international oil companies," MEES said.
"Nor is it clear why Baghdad is sticking to this policy after having lost around one billion dollars of oil revenues in December for no political gain."
The timing of Iraq's return to the market was "anyone's guess", the Nicosia-based industry letter said.
Baghdad's Oil Minister Amer Rashid said last week that Iraq had resumed normal exports from December 13, but the United Nations contradicted that claim, noting that between December 29 and January 5, there was a single loading at Iraq's Gulf port of Mina al-Bakr with a volume of 1.8 million barrels of crude.
It said there were no loadings at the Turkish port of Ceyhan, the only other legal outlet for Iraqi oil sales, which are strictly supervised under UN sanctions imposed after the August 1990 invasion of Kuwait.
In Baghdad, Rashid told journalists on Sunday that Iraq had produced an average of 2.9 to 3.1 million bpd in 2000 and hoped to reach 3.3-3.4 million bpd in 2001.
Former Saudi oil minister Sheikh Ahmad Yamani has urged OPEC to hold back on output cuts expected to be introduced at the cartel's meeting Wednesday in Vienna until Baghdad's position became clear.
"OPEC must wait and see what Iraq will do and cut production only according to what they will do," he said.
"If they (OPEC) don't cut, then (Iraqi President) Saddam Hussein will definitely think twice and come back to the market," he said, adding that Iraq's output could then rise to between two and three million bpd.
The 11-nation Organization of Petroleum Exporting Countries is expected to agree to slash output by 1.5 million bpd -- some five percent of total production -- though some more hawkish cartel members want even steeper cuts to support prices. – (AFP, Vienna)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)