At the Ministry of Oil (MOO) and the State Oil Marketing Organization (SOMO), senior officials say it is business as usual — expanding production, increasing exports and attracting foreign investment. “Everything is fine,” says Assem Jihad, MOO spokesman. “There are problems with security but it does not influence our operations.”

Despite the instability that hit Iraq in April, Jihad says attacks against the export pipeline from the Kirkuk oil fields to the Turkish border have dropped off. The 900-km pipeline ends at the Mediterranean port of Ceyhan. “We had only two attacks on the pipeline in March,” Jihad says, adding there were no attacks in the first two weeks of April.

The respite has allowed the industry to use the 900,000-barrels-per-day capacity pipeline to move Kirkuk crude north for exports based on tenders in March and April, but Iraq is far from issuing long-term contracts for Kirkuk crude. A SOMO official says Iraq’s marketing organization will issue short-term tender contracts and avoid long-term contracts until the northern pipeline has been fully secured. SOMO tendered for 6 million bbl of Kirkuk crude oil in 1-million- and 2-million-barrel allotments from April 19 through 26.

A senior SOMO official says Kirkuk is producing about 400,000 bbl per day. Most northern production has been set aside for exports.

Militant Shiites in southern Iraq also have not targeted the oil infrastructure, despite the violence that has erupted between U.S.-led coalition forces and Shiite militia loyal to radical leader Moqtada al-Sadr, Jihad says.

Overall, Iraqi production is holding steady, although it appears the industry has hit capacity until further infrastructure improvements occur. Jihad says production is about 2.2 million bpd, with 1.8 million from the southern oil fields. Exports edged higher in March, averaging roughly 1.8 million bpd, including the 6-million-bbl Kirkuk tender, a senior SOMO official says. “We averaged around 1.6 to 1.61 million bpd from the south,” he says. The majority of exports were lifted at the Persian Gulf Basra Loading Terminal.

Platts reported on April 13, however, that the average export from Basra was 1.2 million bpd for the first two weeks of April, quoting shipping and port sources. Bad weather interfered with operations.

While MOO officials such as Jihad maintain a positive outlook, the ongoing unrest has affected the MOO in terms of perception and reconstruction. The violence and the kidnappings of foreign nationals make it difficult for the MOO to attract foreign investment and to market business opportunities. Citing security concerns, the Iraq oil ministry has postponed, for the second time, an oil conference to address investment opportunities in the downstream, midstream and upstream sectors. Originally scheduled in Basra for February, it was moved to late April and now will not take place until sometime in the fall.

Despite pervasive security problems, the U.S. Project Management Office in Baghdad expresses an optimistic view about the progress of reconstruction. “The violence has not stopped or slowed down the process,” says PMO spokesman Steve Susens. “In fact, most of our prime contractors are already here and we are actually moving pretty rapidly. From what we are hearing, many of the projects that are ongoing have not been slowed or stopped, at all,” he says. “In fact, there are some cases where the locals are helping to make sure the contractors and the workers are safe.”