Iraq halts crude output from the south

Oil production from Iraq's southern oil fields was stopped on Monday after alleged threats by Shia leader Muqtada al-Sadr's Mahdi Army to disrupt operations, an Iraqi official has said.

    Southern fields have been pumping 1.9m barrels a day

    "Pumping from the southern oil fields to storage tanks at Basra was stopped today after threats made by Sadr," the official said. "It will remain stopped until the threat is over."

    The closure at the Basra-based Southern Oil Company is the first significant shutdown in Iraq's main southern oil sector since the handover of power to the interim government on 28 June. Resistance attacks shortly before the handover cut exports sharply.

    Fighters loyal to al-Sadr roamed the streets of Basra on Monday and controlled major intersections, witnesses said. Most shops were shut and most employees, including those of the Southern Oil Company, did not go to work.

    The al-Sadr "threat" coincided with mortar attacks by his fighters in Baghdad against the oil ministry and threats against the State Oil Marketing Organisation, both situated near the Mahdi Army stronghold of Sadr City.

    Iraq's southern fields have been supplying the Gulf Basra terminal with about 1.9m barrels a day. Exports from Iraq's northern oilfields have operated only sporadically since the US-led occupation last year and remain closed after a series of attacks on the main northern export pipeline from the Kirkuk fields.

    The unnamed Iraqi oil official said storage at the Gulf Basra terminal was sufficient to keep exports running for about two days. Iraq has been exporting about 1.9m barrels a day, all from its southern fields.

    SOURCE: Reuters


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