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Baghdad: Saboteurs blew up a major oil pipeline in Iraq on Thursday, sharply reducing exports from the south of the country for the first time in years, a South Oil Company (SOC) official said.
The resulting blaze was quickly extinguished and officials said efforts were under way to get shipments back to normal from Iraq's second city of Basra where fighting broke out on Tuesday.
It is the first time since 2004 that the vital southern supply route has been disrupted. Officials had different views about how long it would take to restore supplies and the seriousness of the incident.
"This morning, saboteurs blew up the pipeline transporting crude from Zubair 1 by placing bombs beneath it. The pipeline was severely damaged," the SOC official said, speaking on condition of anonymity.
"Crude exports will be greatly affected because this is one of two main pipelines transporting crude to the southern terminals. We will lose about a third of crude exported through Basra," he said.
US crude rose by more than $1 to trade above $107 a barrel after news of the attack.
Officials in Baghdad by contrast were optimistic the damage could be contained. They said the main pipeline was not severely damaged and production could return to normal levels later.
"Instructions are being given to restore pumping to normal levels. This was a minor incident," one official said.
Ground reality
But engineers on the ground in the south said fighting was hampering efforts to repair the line and they were waiting until today morning to begin work. It could then take up to three days to carry out repairs.
An official in Baghdad said a branch leading to the pipeline, rather than the pipeline itself had been affected.
Exports from Basra had fallen to 550,000 barrels per day (bpd) yesterday, down from 1.3 million bpd the previous day, a shipping source said. Exports of around 430,000 bpd of Kirkuk crude continued to flow through a pipeline to Turkey, a source said.
Fact file
Facilities near basra
Heavy fighting continued yesterday in the southern Iraqi city of Basra, the main hub for the country's vital oil production and exports.
Iraq's government relies heavily on oil exports for revenue, and has sustained the flow from Basra even as a violent insurgency targeted the country's oil installations elsewhere. Basra exports were last interrupted by pipeline blasts in 2004.
Following are details on oil facilities in and around Basra.
- Iraqi oil output in the southeast is around 1.8-2.0 million bpd, according to Iraqi oil officials. That accounts for about 80 per cent of Iraq's total output of 2.3 million bpd.
- The North and South Rumaila fields near Basra are Iraq's largest measured by output. South Rumaila produces around 800,000 bpd and North Rumaila about 500,000 bpd. A dozen smaller fields, including Suba, Luhais, West Qurna and Zubair, account for most of the rest of the region's output.
- Iraq's Southern Oil Company (SOC) operates the fields and has its headquarters in Basra.
- Basra oil terminal has the capacity to export around 82,000 barrels per hour, or nearly two million bpd. Exports in February were around 1.54 million bpd. Iraq also exports smaller amounts of crude from the Gulf port of Khor Al Amaya.
- The Shuaiba refinery in Basra province is Iraq's second-largest with a capacity of around 160,000 barrels per day. Shuaiba is currently producing around 100,000 to 110,000 bpd of oil products, according to a refinery engineer. The plant was hit by a fire in January, which the SOC blamed on a mortar attack.
- A 1.4 million-bpd pipeline from the northern fields to Rumaila has been mothballed due to general deterioration and non-functioning pumping stations.
- Around 70-80 per cent of Iraq's total oil reserves, the world's third-largest, are in the southeast of the country.
Source: Iraqi officials, US Energy Information Administration website.
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