This is a problem with the oil infrastructure, more so than sabotage:
Iraq southern oil exports cut 10%
Basra light crude lost to technical problems, northern production still stopped due to sabotage.
January 11, 2005: 11:26 AM EST
DUBAI, United Arab Emirates (Reuters) - Iraq will cut its Basra Light crude oil supply contracts by 10 percent from Feb. 1 through to June due to technical problems, a senior Iraqi oil official said Tuesday.
The official who did not give details, said Iraq's crude oil customers had been notified of the cut, totaling 160,000 barrels per day (bpd), by fax Monday.
"We cannot meet our Basra Light commitments for technical reasons," the official told Reuters. "We will have to reduce from 1 February to the end of June. This is the reality."
"If there is any possibility to restore this shortfall, we will do so," he said.
The reduction comes as exports from Iraq's northern oilfields remain halted by sabotage, dashing the U.S.-backed government's hopes of raising revenue to fund rebuilding and a costly security apparatus.
Iraq's State Oil Marketing Organization (SOMO) originally had secured Basra Light term contract volume of about 1.6 million bpd for the first half of 2005.
Basra Light exports from the mostly Shi'ite south had been steady at around that level. Power cuts that have worsened throughout the country disrupted sales Saturday, but loadings had since resumed.
"They've lost a lot of sales possibilities from interruptions -- caused primarily by problems with electricity. The most practical option was for them to reduce the loading schedules," said one customer.
Oil flowing through Basra
Shipping data showed southern exports running at 1.5 million bpd Tuesday. The tanker Gosglory Lake was loading at 44,000 barrels per hour from berth one at the Basra terminal. The tanker Margaux was loading at 20,000 barrels per hour.
The Basra terminal, offshore in the Gulf, is crucial to sustain flows with sabotage attacks keeping exports of Kirkuk crude from Iraq's northern fields at a standstill for the past three weeks.
The attacks have virtually stopped oil production in the north, which has a diminished postwar capacity of 700,000 bpd.
A bomb ripped off a section of a pipeline feeding 350,000 bpd Baiji refinery Tuesday and another attack targeted a pipeline feeding a power station in the same area, southwest of the oil center of Kirkuk.
"Kirkuk is finished for now," the official said.
The northern fields also supply domestic refineries in the area, which have been idle for the past few days, deepening a fuel crisis in the country.
Prime Minister Iyad Allawi said Tuesday he expected the fuel shortages to ease after the government managed to replenish storage tanks.
But trucking the product to end-users remains a problem, considering lawlessness and insurgents on key roads.
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