April 17, 2012:

LONDON, April 17 (Reuters) - Iraq is looking to gradually privatise its oil refineries and to attract investment in new plants around the country, its deputy oil minister said on Tuesday, as the major crude exporter aims to curb reliance on costly fuel imports. Domestic demand for fuel is rising fast in Iraq as in other big Middle East crude oil producers such as Saudi Arabia. Baghdad, which is boosting its oil production, is also pushing ahead with a multibillion-dollar downstream expansion.

"We would like to see the private sector increase its role," Deputy Oil Minister Ahmed al-Shamma said at a conference in London. "You shouldn't have the ministry of trade buying and selling commodities; it's out of date." He added: "We are looking to complete renovation of old refineries and privatise them gradually. That's the ultimate goal." Demand for fuel is growing fast, the deputy minister said. Iraq's gasoline demand now exceeds 20 million litres per day, and its gasoil use is above 22 million litres per day. "Domestic demand is increasing rapidly. People are driving around at midnight, when a few years ago there was an effective curfew at 6 p.m," Shamma said.

"There has been a very sharp increase, but it will taper off."

REFINERY PLANS

Iraq has three main refineries - Baiji, Daura and Basra. Total capacity at end-December stood at 567,000 bpd, Shamma said. Through improvements at the existing sites, Iraq aims to increase capacity to 610,000 bpd by the end of 2012, he said. Its target for next year is 750,000 bpd. Over time, four proposed plants would add about 750,000 bpd: Kerbala, Missan and Kirkuk, each with a capacity of about 150,000 bpd, and Nassiriya, with a capacity of 300,000 bpd. Of those four, Iraqi officials previously said Nassiriya would be the lowest priority, because it is designed to run on crude from the Nassiriya oilfield, which has yet to be developed.

Shamma said some of the products from the Nassiriya refinery would be available for export and that infrastructure was being put in place in southern Iraq to facilitate this. "We have provided all the facilities to make it easy for investors. There are four jetties being built for jet fuel, fuel oil, gasoline and gasoil," he said. "There's a hurry to get refineries built."

By Reuters