Under the sound policy pursued by the Iraqi Oil Ministry at the current stage, characterized by utmost accuracy and clear goals, it is working on the implementation of an integrated reformative oil program to serve the Iraqi people taking studied scientific steps to cope with difficult economic and financial challenges faced by the country, and the advancement of the real development of the economy, planning to increase fiscal revenue for national companies.
In light of the success of this policy, Iraqi Oil Minister Jabbar Luaibi , the independent oil expert, announced the export of about 60 thousand tons of liquid gas, and more than 356 thousand cubic meters of condensate.
al- Luaibi confirmed that the first half of this year witnessed the export of 24 shipment of condensate, and other 24 shipment of liquid gas through the loading dock allocated for exports of Basrah Gas Company pointing out that the export operations of gas investment have achieved additional financial revenues for the federal treasury.
al- Luaibi added that the oil ministry has opened a new quays earlier to load liquid gas and condensate in the port of Umm Qasr which will provide a high smooth in the export operations.
During al- Luaibi ‘s tenure as oil minister , Basra crud was sold for the first time through the DME, which the Bourse organized the latest auctions for the benefit of the Iraqi Oil Marketing Company “SOMO”, to conduct the first public auction in April 2017, and sold the cargo consisting of two million barrels of Basra heavy crude with a premium amounted to US $ 1.37 a barrel above the official selling price for the month of September , and a relatively higher price indicates to the proper demand on the class as the Kingdom of Saudi Arabia, the largest oil exporter in the world, focusing on identifying (integrating) the average heavy crude as part of an agreement with other producers, to curb the global glut.
The export of this cargo of Basra crude contributed to the rise in official Iraqi prices compared to competing Saudi varieties, according to Bloomberg survey of five traders involved in the oil market of the Middle East.
The large premium of crude oil loading of the month September reflects the anticipated market conditions for heavy crude oil at the end of this year , as well as expectations of a reduction of the heavy crude oil offered in the spot market in compliance with the OPEC agreement , as 28 companies took part in the auction, where 17 participants present more than 25 tender within a time window of two minutes, it has been more than 50 companies registered in the DME, to participate in the auctions held in favor of “Sumo”
it was notable that since the month of April of this year, 10 million barrels of Basra heavy crude oil have been sold through the auction platform of Dubai Mercantile Exchange (DME) , noting that during the current June , a shipment of Basra heavy crude was loaded for sale for the month of August at a premium of US $1,18 per month , this means that the large premium of crude oil , loading for the month of September depends on the expected market conditions for heavy oil crude in late 2017 with expectation that OPEC will continue to limit the heavy crude oil offered in the spot market .
Oil marketing company “SOMO” received an independent evaluation through selling in the DME (Dubai Mercantile Exchange ) the value of its crude oil which can be used to determine the official selling price, as it reduced the official selling price for the category of Basra light crude oil by less than Saudi Arabia, and Iraq increased the cost of the category of Basra heavy crude oil more than the category of Arab heavy crude oil ; which led to the expansion of the price difference between the class of Basra light crude oil and the Arab middle crude oil to the highest level since September , 2012, while category of Basra heavy crude oil was reduced to the category of Arab heavy crude oil to the least in six months.
The statement of Bourse of Duba confirmed for the contracts of futures energy and commodities, that the auction has attracted the attention of oil companies and traders and refineries, where more than twenty traders took part in it through 40 bids in two minutes.
The total oil exports in the first half of 2017 this year amounted 592 million barrels, the US company acquires a stake in Al – Zubair field, and the highest price for the shipment amounted of 31 cents , added to it the official prices of sales of Basra Light crude .
On the purpose of the sale of the cargo, Director General of the company “SOMO” responsible for Oil Marketing in Iraq , Falah al – Amiri said: ” we have included DME as an option to sell Basra light crude, in order to meet the demand in Asia , and to offer customers an equal opportunity to access our spot cargos “.
The DME is , which opened in 2007, one of the specialized stock exchanges (Bourse) around the world and its main contract is the futures contract for crude of Oman , the third standard price of crude oil in the world, the only criterion for crude oil , which is exported from Oman and Dubai, and under the DME guidelines, the vendors provide details of for crude type, quantity, delivery and other specifications such as the lowest price and the date and duration of the auction (for bidding).
The process done by an electronic platform do not reveal the identity of the participants, so quotes are available for all to see and speculation on them.
The president of marketing at the DME Mayssam Hamada pointed out “The auction will be completed in a few minutes , noting that it can take hours or even days during the traditional tender process, and is likely to reach a much broader base from competing parties (opposing) and in an immediate way of goods for all who are interested in bearing conditions and customers, indicating that the path of audit provided by the electronic auction process has an increasing importance for many companies “.
sales help producers, to unload cargo relatively faster if they become available due to unexpected incidents such as the stop of the refinery , and the supply of crude oil through auctions is also part of their efforts to enhance business expertise in a market characterized by increasing competition and supply, and the entry of the national oil companies such as SOMO and Kuwait Petroleum company in partnership with the global commercial countries, Richard Gori, Director General of the Council , consultant of Industry in JBC Energy GmbH recalls :” the ways of traditional markets will start to develop in the middle east to become a commercial practice with producers who are looking forward in the auction for more commodities in the market, they may have understood the best value for their crude oil “.
The achievements of the Ministry of Oil in the era of Luaibi:
…………………………………………………………………
– The Iraqi Oil Ministry, announced the launch of the third well in the border Sinbad field in Basra province, as international companies were called to contribute to the development of 10 border oil fields , al- Luaibi confirmed in a statement that ” the ministry is keen to develop all border fields for optimal investment of it , “stressing that” the ministry has developed a plan to develop these fields , whether by national effort or through contracting and cooperation with international companies, ” the ministry ‘s plans seek to the development, rehabilitation and economic development, to raise the production capacity of the field of Allhis to more than 120 thousand barrels per day.
– Luaibi said: ” The ministry will begin the construction of surface facilities,” praising the “national effort for its active participation in it by the Basra Oil Company and the Iraqi Drilling and others “, while the ministry ‘s spokesman , Assem Jihad , said: ” The drilling results indicate the presence of promising reservoir energy will add good amounts of crude to national production. ”
– Oil Minister announced that the ministry is in the process of implementing structural and development projects in the city of Mosul, pointing out that: “There is a plan by the Ministry of Oil to visit the city of Mosul and the implementation of vital projects in them.
– Laibi announced that “the ministry has projects in all governorates of Iraq, including Basra, where the implementation of a project for the rehabilitation of two rivers , as well as a project to build a tourist resort, adding that” the oil ministry presented to Basra a gift which is the implementation of two projects, one of them requires the rehabilitation and beautification of rivers Ashar and Khandaq , which is being in the process of implementation and the other to establish an integrated leisure tourist resort on the banks of the Shatt al-Arab at the site of an old oil facility located in the Amuftih area, over an area of 500 acres, the stage of lifting the rubble is nearly on completion, “noting that” the ministry is not limited to work on Basra , but has development projects in the other governorates , we have started building an industrial city linked to the district of Alekhala, and will be the nucleus of a large city in the province of Maysan. ”
– in the province of Najaf , the minister of oil instructed to increase the production capacity of Najaf refinery by adding new productive units with a capacity of 20 thousand barrels to the current capacity of the refinery in Najaf, the 30 – thousand barrels of raising the capacity of the refinery to 50 thousand barrels per day, adding that the ministry has projects for many refineries in the South , central and north of the country, to produce more than one million barrels of oil derivatives to reach self – sufficiency in petroleum products and export the surplus, which will increase the financial revenues of the state. ”
Laibi during his visit to the province stressed that ” the Ministry has big plans for the development of production in the Iraqi refineries and increase production units and improve it to meet the local need of oil derivatives and reduce import and provide the hard currency of the Federal Treasury of the country, ” thus contributing to the economic development process and overcome the financial crisis, ” the deficit “suffered by Iraq.
The ministry suggests that Iraq is suffering a from the oldness “extinction” of its oil facilities which is often produced less than design capacity indicating that Iraq has three large refineries: al-Dourah , Basra and Baiji, as well as 10 other small oil refineries spread over a number of Iraqi provinces, and the number of refineries in the Kurdistan region.
– the Ministry of Oil completed the refinery of al-Doura, which is an industrial oil integrated complex and it is one of the oldest large oil refineries in Iraq, and is located in the south – eastern part of the city of Baghdad, and the foundation stone was laid to it in 1953 and began to work by the year 1955, and a production of 140,000 barrels per day, and is located on an area of 2.5 million square meters.
– Luaibi pointed out that “five new units were completed by national efforts,” and that ” the completion of new projects comes within the ministry ‘s plans to modernize the Iraqi refineries, through the addition of new units working with advanced technology , which contributes to the upgrading of the quality of the fuel product from the refinery of Doura , ” noting that new projects included of hydrogen purification unit and the unit to improve the specifications of liquid gas , project of blending the fat and the unit of hydrogen production, and the unit of Azemrh of light naphtha , which produces improved gasoline that contribute to the reduction of gasoline import operations by 20% and thus will provide hard currency for federal treasury , as well as the completion of the project of establishing 10 reservoirs contribute to increasing the storage capacity of fat and asphalt.
– The deputy of the oil ministry for the refinery affairs Fayadh Hassan Nima stressed, “the ministry is working on ambitious plans for the rehabilitation of the refinery sector and development it by inviting international companies to invest in five large refineries with modern technology distributed to the provinces, the ministry is working on a review and study some of these offers for discussion with the parties wishing to do so.”
– General Manager of Midland Refineries Company Zaid Kadhim, said: “workers at the refinery offer this achievement as a modest gift to our fighters from the security forces and the popular crowd and the supporting entities , heroes who defend our generous homeland , and defend the future of it to eliminate the terrorist organization Daesh .”
– spokesman of the ministry Assem Jihad made it clear , that: “national cadres contributed to the increase of the production of the refinery to the rate of 140 thousand barrels per day and up to 150 thousand barrels at the end of this year.”
Jihad added : “Oil Minister Jabbar Ali Luaibi has directed the concerned companies and departments to speed up setting up the necessary plans for the rehabilitation and operation of the affected refineries , including: Baiji refinery, al–Sinya , Haditha and others as well as refinery of Qayyarah , which has been rehabilitated recently , ” noting that “it is part of the ministry ‘s priorities to speed up the rehabilitation of oil facilities in the affected provinces from the terrorist organization Daesh, providing fuel and electric power to citizens in the province of Nineveh. ”
Shatha Khalil
A researcher at the Economic Unity
Rawabet Center for Research and Economic Studies