BAGHDAD, 27 April 2004 — Iraq’s vital southern oil terminals were back in operation yesterday, after being shut down by waterborne suicide attacks that killed three US sailors, interim Iraqi Oil Minister Ibrahim Bahr Al-Ulum said. But the attacks caused worries on world markets, where oil prices rose in early trading in London.
Ulum said operations at the main Al-Basra Oil Terminal resumed at 9 p.m. (1700 GMT) Sunday, after the smaller Khor Al-Amaya terminal restarted earlier in the day. “Exports have been restored to their previous levels and security measures have been reinforced in collaboration with coalition forces to protect the oil installations,” the minister said.
Up to 90 percent of Iraq’s current oil exports of 1.6 million barrels per day are loaded through the offshore southern oil terminals, according to the minister. Operations had stopped Saturday after three explosives-laden vessels blew up as security forces prevented them from slamming into oil installations. There was no damage to the Kohr Al-Amaya oil facility, which can handle about 400,000 barrels a day, but operations at the Basra terminal seven kilometers (four miles) away were interrupted after separate explosions damaged the generator, causing a power cut.
Authorities have plans to ramp up crude output to three million barrels per day by the end of 2004, up from 2.8 million bpd before US-led troops invaded the country but still down from the 3.5 million bpd Iraq exported before international sanctions were imposed over the 1990 invasion of Kuwait.
Crude exports are vital for Iraq, particularly at a time when it is seeking to get back on its feet after years of war, mismanagement and oil sanctions.
In its 2004 budget, Iraq’s Finance Ministry put last year’s oil exports income at about $3.3 billion, and banked on an increase to $12.8 billion this year, or most of the $13.75 billion in anticipated revenue. The budget foresees a further boost to $20.55 billion in oil export income next year. Iraq has 113 billion barrels of proven oil reserves.
Earlier this month, US President George W. Bush said oil income was higher than had been anticipated. He was speaking after publication of figures showing Iraq produced 2.4 million barrels a day in March and exported 1.85 million bpd during the same period.
On the London market yesterday the price of benchmark Brent North Sea crude oil for June delivery climbed 47 cents to $33.56 per barrel in early afternoon deals. New York’s reference light sweet crude June contract traded 33 cents higher at $36.79 in pre-opening electronic trading.
