Violence in Iraq, sabotage in Nigeria and strikes in Europe

Abstract

This section summarizes downstream developments of the previous month. Exploration & Production are covered in 'Upstream Review'. An upsurge of violence in Iraq threatened a recovery in output that began earlier this year. Production in the northern fields hit a post‐invasion high of 620,000 bpd in March, rising by 180,000 bpd in one month. Fighting in the south, however, cut production there by more than 100,000 bpd as government troops tried to subdue Shi'ite militias in and around Basrah. Oil installations damaged in the south included a pipeline and a pumping station. The Iraqi government nevertheless announced that oil production would reach 2.9 mn bpd by the year's end, requiring an increase of nearly 500,000 bpd over April 2008 levels. Foreign help is to be sought via a series of technical service agreements and ‐ later this year ‐ an upstream licensing round. Japan's Ministry of Economy, Trade and Industry says it wants a bigger role for Japanese oil companies in both the upstream and downstream sectors in Iraq. Kurdistan says it is negotiating with Baghdad to export oil produced from new oil fields there. The central government does not recognize production agreements drawn up by the Kurdistan Regional Government. The EU ‐ desperate for gas to fill its Nabucco pipeline ‐ has approached Iraq for up to 1 bn cfd.