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Abu Dhabi, UAEWednesday 3 March 2021

Iraq to halve oil product imports by end of year

Baghdad is looking to upgrade its refineries, which are among the oldest in the region

Iraq's oil minister Ihsan Ismael, left, with Prime Minister Mustafa Al Kadhimi at a refinery at the Rumaila oilfield in Basra. Reuters
Iraq's oil minister Ihsan Ismael, left, with Prime Minister Mustafa Al Kadhimi at a refinery at the Rumaila oilfield in Basra. Reuters

Iraq plans to halve imports of refined products such as petroleum and gas oil by the end of this year.

Oil minister Ihsan Ismael told the Iraq Oil Report website last Tuesday that the country would not need to import any petrol or gas oil by the end of 2023.

Increased capacity at the Nassiriya, Dhi Qar, Basra, Shuaiba, Baija and Karbala refineries is expected to help in reducing Iraq's dependence on imports.

Years of war and sanctions have left the country unable to meet domestic energy requirements despite it being Opec’s second-largest producer.

Baghdad, which has prioritised the production of crude to boost revenue, intends to upgrade its refineries, which are some of the oldest in the region.

This will hasten efforts to achieve self-reliance and curb imports at a time of dire economic distress.

Iraq’s refining throughput stood at 611,000 barrels per day at the end of 2019, according to the BP Statistical Review of Energy.

Its capacity is relatively small compared to the country’s oil production, which stood at about 3.8 million bpd in February, based on secondary Opec sources.

In comparison, the UAE, Opec’s third-largest producer, had an output of 2.6 million bpd in February and a refining throughput of 1 million bpd in 2019.

Iraq plans to upgrade its refinery at Karbala, in the country's south, by the end of 2023, with a 70,000-bpd first phase set for completion next year.

“That will cover 35 to 40 per cent of our current imports of gasoline and gas oil. That will be a good addition to our refinery capacity,” Mr Ismael said.

Iraq’s South Refineries Company also plans to make critical upgrades at the units it operates, including Shuaiba refinery in Basra.

Mr Ismael said there was good progress at South Refineries Company “and within the next five to six months, these units will be in operation and this will ... [increase] our refining capacity”.

He said Iraq’s production cut to meet its Opec+ quota will come from the Kurdistan Regional Government.

“The compensation is around 18 million barrels,” he said.

Opec+ has been drawing down 7.2 million bpd of crude from oil markets since the year began. Iraq has struggled to comply with the pact to restrict output.

Updated: February 15, 2021 03:59 AM

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