Iraq’s southern oil flow recovers after bomb blast

BAGHDAD (Reuters) – Iraqi oil exports returned to normal in Basra on Friday after a bomb attack a day earlier, but heavy fighting throughout the region has sparked unease about the security of the southern oilfields and pipelines.

Saboteurs attacked Basra’s oil pipeline system on Thursday, briefly interrupting exports from the south of the country for the first time since 2004.

“As of 10 p.m. (3:00 p.m. EDT) last night, things are back to normal,” a senior Iraqi oil official told Reuters on condition of anonymity.

A four-day-old Iraqi army crackdown on Shi’ite cleric Moqtada al-Sadr’s Mehdi Army in Basra, Iraq’s second city and its gateway to the Gulf, has ignited clashes across the south and has kept the oil industry on edge.

“The southern pipeline is very long and always a target. But destroying the pipeline helps no one,” the oil official said.

About three quarters of Iraq’s exports flow from the south of the country, which has largely escaped the persistent problems affecting shipments from the north.

Militant groups and the federal government are battling for control of the region’s oil wealth, which makes up the bulk of government revenues.

Whether or not oil flows are interrupted, the fighting could impact supplies because it has made traveling to the oilfields and facilities harder, a South Oil Company official said.


Thursday’s attack forced the temporary shutdown of at least three oil pipelines, which usually pump around 1.5 million barrels per day (bpd) to the Basra terminal, the senior oil official said.

“When the fire erupted, they didn’t know which one was damaged and they had to shut all of them,” the official said. “When they put the fire out, they discovered it was the smaller of the three.”

An investigation showed a smaller, 28-inch pipeline, pumping about 100,000 bpd, was “severely damaged,” said Ibrahim Wali, senior technician working on repairs at the pipeline.

One of the two major pipelines, which are both located nearby and are more than 40 inches in diameter, had minor damage and was quickly repaired on Thursday, Wali said.

Backup pipelines from southern oilfields kept flow levels to the terminal near normal, he said.

The technician said he expected the damaged 28-inch pipeline to be repaired later on Friday.

A shipping source at the Basra terminal said the flow rate from the southern oil pipeline system early on Friday was 1.75 million bpd, up 550,000 bpd from the previous day and above the average daily rate.

On Thursday, oil prices briefly rose by more than a dollar, but later shed some of their gains and on Friday were trading down on the day at close to $107 a barrel.

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