Iraq plans to launch a new Basrah Medium crude export grade in a bid to help stabilize the quality of its existing Basrah Heavy and Light export grades as more production is sourced from lower quality oil deposits.
The new Basrah Medium grade will have an API gravity of 29-30 degrees and 2% sulfur, SOMO Deputy Director General Ali Nazar al-Shatari told S&P Global Platts.
There will also be slight changes to the existing grades. Basrah Heavy will remain largely the same at 23 degrees API and 4% sulfur. However, Basrah Light will be become even lighter, rising to 34 API degrees, up from an average of 29-31 degrees currently.
Shatari did not give any further details on when the new grade will be launched, saying it would be launched "whenever logistics allow."
The OPEC producer shipped some 3.246 million b/d in February, from its Persian Gulf terminals, according to the latest data from the oil ministry, with Basrah Light accounting for about 75% of the exports.
The plan to introduce a new grade is aimed at providing "more stability" in existing grades.
However, it has raised some questions from Iraq oil watchers. Only the Rumaila and Zubair fields produce crudes lighter than 31 degrees API, while nearly all of the country's future production is set to come from heavier deposits.
Iraq began exports of Basrah Heavy in June 2015, after separating the existing Basrah crude stream into light and heavy grades. Both are loaded from the country's southern oil export terminals and single point moorings in the Persian Gulf.
The move came as a measure to improve and stabilize the quality of the more lucrative Basrah Light grade, as more and more heavy oil joined the export stream from new producing fields.
It followed persistent complaints over variable quality from buyers which led to cutbacks in upstream production and ships rejecting loadings.
Iraq's Basrah Light and Basrah Heavy are two of Asia's key grades, competing with Middle Eastern medium-heavy sour crudes. Asia remains the major outlet for SOMO barrels, accounting for around 60%. Europe is also a key buyer, and has become a key hub for medium sour barrels, especially from Russia, Iraq, Iran, and Saudi Arabia.
OIL PRODUCTION FLAT
Separately, SOMO said that Iraqi production stayed steady at 4.36 million b/d in February, as a fall in southern exports was mainly offset by a rise in flows from the semi-autonomous Kurdistan Region.
Last week, the country's oil ministry had said that federal crude oil exports from Iraq 's southern Persian Gulf terminals fell to 3.426 million b/d in February, down 2% from the previous month.
Iraqi oil production has remained stable at 4.36 million b/d from September to February apart from December when it was 4.362 million b/d, according to ministry data.
But analysts have regularly voiced doubts about Iraq 's recent official data, especially since production of almost 280,000 b/d from the fields of Bai Hasan and Avana Dome has been shut in since October 16.
Iraq increased output to 4.43 million b/d in February, a S&P Global Platts OPEC survey found, as fields in the Kurdistan region in the north more than offset a drop in exports from the southern port of Basra due to weather conditions. Source: Platts