Output at Iraq's Rumaila oilfield has been halved from about 1.4 million barrels per day after a bombing hit southern pipelines, but crude exports were normal, Iraqi officials said on Wednesday.

Iraq is looking to its vast oil resources for future stability as it emerges from years of war. But renewed attacks on its oil infrastructure are a challenge to Iraqi security forces as U.S. troops withdraw by Dec. 31.

Salah Mohammad, general manager of the Rumaila Operating Organisation, told Reuters production from Rumaila oilfield was cut by around 700,000 bpd since Tuesday due to the bombing on the pipelines network.

Total production from Rumaila was at around 1.4 million before the bombing, he said.

"We halted production in Rumaila South because of the explosion. It has been halted until now since yesterday," he said. "The pipeline network was a main one."

Rumaila, the workhorse of Iraq's oil industry, has estimated reserves of around 17 billion barrels and produces the bulk of Iraq's total output of 2.95 million bpd now.

The field is being developed by British oil major BP and Chinese partner CNPC.

Three bombs hit an oil pipeline network that transports crude from southern Iraqi oilfields to storage tanks around the oil hub of Basra, causing a fire that raged all night.

Iraqi officials said the blaze had been put out on Wednesday morning, but an oil police source later said strong winds had reignited the fire.

Iraq's oil exports from Basra will not be affected, an oil ministry spokesman said.

"We have enough storage until we repair these pipelines. We will bypass the oil pumping operations through another pipeline network until repairs are done," spokesman Asim Jihad said.

It will take no more than a week to repair the damage done to the pipelines, he said.

On Wednesday, export flow was at normal rates of 1.68 million bpd from Basra, a shipping source told Reuters. An oil official said Iraq had enough crude stored to keep exports at same levels for two-three days.

The pipeline that was hit was carrying crude to the Zubair 1 storage facility near Basra.

In early June, militants blew up a storage tank at Zubair 1, despite tight security.

OIL SECURITY WORRIES

Basra, which handles most of Iraq's oil exports, has generally seen fewer attacks this year than other cities in the country following an overall decline in levels of violence since the peak of sectarian conflict in Iraq in 2006-07.

In October, two bombs hit pipeline networks transporting crude from Iraq's Rumaila oilfield, the country's biggest, cutting output from the field to 530,000 barrels per day from about 1.24 million bpd.

Iraq's oil police have stepped up patrols to protect installations against a possible surge in al Qaeda attacks as U.S. troops withdraw before Dec. 31, the head of the force said on Tuesday.

An industry source said international oil companies working in the southern oilfields had been asked to reduce production after the attack, but it was not clear if this was a precautionary measure or because of damage to the pipelines.

The companies will look at ways of bypassing the damaged sections of pipeline if necessary, the source said.







Source: Reuters