LONDON # A guerrilla attack on the Iraqi Oil Ministry in Baghdad on Friday is unlikely to affect oil production or exports, Iraqi oil officials said. However, after sabotage at a number of oil and gas pipelines in recent months, the new development highlighted the vulnerability of the oil sector, including its staff. Rockets struck two hotels where foreign journalists and US civilian contractors, including staff from Halliburton subsidiary Kellogg Brown & Root, were staying. In southern Iraq, however, exports from the Basrah Oil Terminal in the Mideast Gulf continued to get back on schedule after weather-related delays earlier this month. So far this month, 19 cargoes have been loaded, totaling 34 million barrels of oil, for an average export volume of 1.6 million barrels per day, according to Energy Intelligence calculations, but local agents report that security is tenuous.
The Iraqi resistance seems determined to undermine US efforts to sell Iraqi oil and use the proceeds to finance reconstruction. The rockets fired on the ministry compound in the early morning hours Friday came from a donkey cart, hitting the fifth floor of the northern building that houses the State Co. for Oil Projects, one of 15 public companies under the oil ministry umbrella.
“There was a fire on the fifth floor that was extinguished quickly, but there are no casualties. It will have limited effect on our operations,” Thamer al-Ghadban, the former chief executive of the oil ministry who was recently appointed adviser to the minister, told Energy Intelligence Briefing from Baghdad.
The fact that the incident occurred on a Friday # the weekly holiday in Iraq, when ministry staff would not normally be at work # could indicate that the attack was meant to send a message rather than target personnel. The ministry is entirely staffed by Iraqis, but US soldiers have been stationed at the entrance to the compound since the fall of Baghdad to US troops in April. More recently, Iraqi policemen have also been stationed at the site.
According to al-Ghadban # who was refused entry to the compound by the US Army on Friday, while they defused unexploded rockets # US troops should leave the ministry within weeks and hand over security to Iraqi policemen. “It was previously decided that they would leave the site shortly, and security will be 100% insured by Iraqi security men and policemen. We’ve always said that we are capable of insuring our own protection, and this will reduce the dangers as well,” al-Ghadban said.
Iraq’s State Oil Marketing Organization (Somo), the department in charge of managing Iraqi crude sales, is located less than 2 kilometers from the ministry in a separate compound, which also accommodates housing units for staff. Somo’s offices were unharmed in Friday’s blast.
Iraq’s production capacity has been hovering close to 1.9 million b/d, and plans are to push it over 2 million b/d from January. Somo is gearing up to export at least 1.7 million b/d of Basrah Light from the southern oil fields.
November shipments from the Basrah Oil Terminal are recovering from previous delays, with the Noto for Koch and the Magdelaine for Taurus currently loading about two or three days behind schedule.
The US Gulf-bound very large crude carrier (VLCC), the Millenium for Valero, sailed Thursday with 2 million bbl and the Asian-bound Astro Castor for Royal Dutch/Shell, sailed Tuesday, also with a 2 million bbl cargo.
The British Purpose for BP sailed earlier today, with just 1 million bbl, heading west to either the US or Europe. The Astro Libra for Italian refiner API is currently at the berth waiting to load.
Two VLCC’s are currently at anchor: The Ikomasan for Shell, destined for Asia, and another Asia-bound vessel, the Falcon, for Indian Oil Co. (IOC).
Port agents maintain that daily export rates are still in the 1.3 million-1.4 million bbl range, with a maximum hourly loading rate of about 80,000 bbl per hour. The high export figures are still attributable to the large number of October cargoes that left early in November (EIB Oct.29).
“There are no ongoing improvements at this point, in terms of increased output at Basrah. All four berths are operational, but only two vessels at a time get loaded or the process would be painfully slow. The storage at the terminal is minimal, as well,” said a shipping agent.
December loadings are shaping up with 20 vessels lined up to take approximately 34 million bbl of Basrah Light, or 1 million b/d. Interestingly enough, Taurus and Koch are expected to be co-loading two 2 million bbl cargos in December # one on the Magdaleine and the other a few days later on the Margaux # with each trader taking 1 million bbl per cargo to the US Gulf.