Plans for major reforms in Iraq’s oil sector have been postponed as the interim government focus on its daily problems, the Middle East Economic Survey reported on Tuesday.
The Cyprus-based weekly survey said that plans from top government officials over the past few months were put on hold as priority went to establishing security and preparing for elections in January.
Some of the current problems include the repeated attacks on the local and export pipeline system and on oil installations, as well as the safety of oil workers.
Other problems are provision of adequate petroleum products supplies for the domestic market and tackling the smuggling of crude and products to neighboring countries.
Another important problem is keeping the present output capacity of 2.5 million barrels per day, while gradually increasing it to 3.0 million barrels per day over the coming year.
The Ministry of Oil is also studying the development and construction of projects to improve capacity and operations, while the cabinet had already approved the appropriation of a capital expenditure budget of three billion dollars, the highest figure in a single year.
The MEES report also said that the Ministry of Oil wants to establish relationships with international oil companies, despite the security conditions which stopped executives visiting Iraq. Companies such as ChevronTexaco, Shell, ExxonMobil, Lukoil, BP, Petronas, Ivanhoe and Tigris had been contacted to help in the Iraqi oil establishment.
The survey added that Saudi Aramco has set its December crude pricing formulas, with further reductions for most grades to all-time lows with respect to benchmark crudes. Iran and Kuwait also announced lower crude price formulas for December deliveries.
The report also said that producers of sour and heavy crude had difficulty selling during the last two months after the Organization of Petroleum Exporting Countries (OPEC) agreed to increase production.
