Iraq goes to polls, China seeks more oil and UK worries about petrol

Abstract

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'. Following a month in which US and British forces suffered their heaviest daily casualties, the Iraqi people voted in large numbers for a new national assembly (see 'Focus'). Violence, however, continued after the election and oil installations were reported damaged, including a pipeline linking the Kirkuk oil field to the Baiji refinery and a further line between Baiji and the refinery at Daurah. The export line connecting Kirkuk to the Turkish Mediterranean port of Ceyhan was also hit. Sabotage to electricity installations affected oil pumping stations in the south of the country cutting production and forcing the Iraqis to announce a 10% cut in contract volumes of Basrah Light until the middle of the year. An official investigation into the UN‐administered Oil‐for‐Food Programme concluded that the man in charge, Benon Sevan "repeatedly solicited" oil for a company called Africa Middle East Petroleum. A further report into other allegations of corruption in connection with the programme, which supervised export sales of Iraqi petroleum from 1993 to 2003, is due later this year. Relief at the apparent success of the Iraqi election caused crude oil prices to fall by about $3 a barrel. OPEC ministers did their bit for oil prices by agreeing not to cut output at their meeting on 30th January. Quotas remain unchanged at 27 mn bpd. The organization's target price band of $22‐28 a barrel, however, has been suspended. A new one will be discussed in March. Kuwait announced it was to increase security at its oil installations following an attack by armed men in an area close to the emirate's largest refinery, at Mina al‐Ahmadi.