Violence in Iraq and Nigeria, OPEC cuts output, admits Angola

Abstract

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'. Iraq ended 2006 with its crude oil exports at zero, its oil industry in need of "urgent attention", according to a report delivered to the US President and Congress, and its domestic security situation spiralling out of control. The execution of former President Saddam Hussain on 30th December failed to pacify the country, as the government appears to have hoped, as more than 2,000 Iraqi civilians died during the month of December and US military casualties passed the 3,000 mark. Crude oil exports ceased as bad weather closed the Persian Gulf terminals of Basrah and Khor al‐Amaya. Exports via Ceyhan were already at a standstill, following recent attacks on the pipeline from Kirkuk. The country's main refinery, at Baiji was closed for part of December following threats to workers there and an attack on its main supply pipeline from Kirkuk. The government tried to relieve the resulting shortage of refined products by arranging to import some 6,300 bpd of fuel from Iran. The black‐market prices of some refined products were reported by the Arabic newspaper, al‐Hayat to have reached record levels. The Oil Ministry estimated that Iraq's oil exports were 1.6 mn bpd during 2006. Iraq has agreed to supply Jordan with 10,000 bpd of crude oil at a discount of around $18/bbl.