Iraq inaugurated a new offshore oil export terminal in the Persian Gulf on Sunday in a vital step to ease infrastructure constraints and to bring sorely needed cash for reconstruction after decades of war and international sanctions.
During a ceremony in the oil-rich province of Basra, Iraq's Prime Minister Nouri al-Maliki opened the tap to start experimental pumping for the floating terminal located about 35 miles (60 kilometers) off Iraq's coast.
Iraq plans to start the actual loading of crude in a week to 10 days, initially boosting oil exports through the country's south _ which currently stand at about 1.7 million barrels a day _ by 200,000 to 300,000 barrels per day, said Dhia Jaafar, the director-general of the state-run South Oil Co. The terminal's full capacity will be 900,000 barrels a day.
The new Single Point Mooring (SPM) is the first of five export facilities that would eventually handle about 5 million barrels a day.The second floating terminal will be ready in the coming two to three months, Jaafar added.
The project is part of a $1.3 billion plan to expand export facilities in the south.
"With this project we will have no problems for the coming ten years regarding our oil export capacity," said Falah al-Amiri, chief of Iraq's State Oil Marketing Organization.
Iraq currently produces 2.9 million barrels a day and its total daily oil exports averaged 2.145 million barrels in December. It plans to pump 3.4 million barrels this year and to increase exports to 2.6 million barrels a day.
The government relies on oil exports for 95 percent of its revenue.
Iraq says it ultimately hopes to use these revenues to diversify the economy.
"When we talk about reconstruction, we need only oil revenues as a source of wealth, and through this we grow other sectors such as agriculture, industry and others," al-Maliki said at the ceremony.
"We have to deal with our wealth on the basis of justice and equality because it is the wealth of the country, and deal with it in a transparent way that reassures the people."
Although Iraq sits atop the world's fourth largest proven reserves of conventional crude, about 143.1 billion barrels, decades of sanctions, war, sabotage and neglect have battered the sector.
Since 2008, Iraq has awarded 15 oil and gas deals to international energy companies, the first major investments in the country's energy industry in more than three decades.
Baghdad aims to raise daily output to 12 million barrels by 2017, a level that would put it nearly on par with Saudi Arabia's current production capacity. Many analysts say that target is unrealistic, because of the degraded state of the industry's infrastructure after wars and an international embargo that lasted more than a decade.