Basra, Iraq – Oil production at Iraq’s largest oilfield, Rumaila, has been reduced by 300,000 barrels per day (bpd) following a fire that broke out last week, an Iraqi oil official confirmed on Monday.

The disruption affects one of the most crucial oil-producing sites in the country, which typically pumps around 1.5 million bpd.

Mohammed Al-Najjar, Iraq’s National Representative to OPEC, told Bloomberg that Iraq currently has no timeline for restoring full production at the site.

The incident has raised concerns about the country’s oil exports and the stability of production in OPEC’s second-largest producer after Saudi Arabia.

The fire erupted on Friday at a decommissioned storage tank located in the fifth gas separation station (DS5) in northern Rumaila.

The Iraqi oil ministry swiftly responded, stating that the fire had been contained and that no staff members had sustained serious injuries. However, three energy sources informed Reuters that two local oil workers suffered minor burns.

Despite the ministry’s assurances, the immediate impact on production has been significant.

The oil ministry has attributed the fire to “unidentified technical reasons” but has not disclosed further details about the cause. The extent of the damage and the potential long-term implications for Rumaila’s output remain uncertain.

Major Oil Players Affected

Rumaila is jointly developed by UK-based BP, China’s state-owned PetroChina, and Iraq’s state-run Basra Oil Company (BOC).

These entities have worked together to enhance production at the vast oilfield, which accounts for nearly one-third of Iraq’s total crude output.

BP reports that oil production at Rumaila has surged by 40% since 2010, reinforcing its status as one of the world’s most prolific oil fields. The field is estimated to hold around 17 billion barrels of recoverable oil, ensuring its strategic importance in Iraq’s energy sector.

BP and PetroChina have also established the Basra Energy Company Limited (BECL), an incorporated joint venture (IJV) that took over management of Rumaila’s interests in June 2022.

The company is tasked with optimizing investments and securing external financing to sustain operations until the expiration of the existing Technical Service Contract in 2034.

Uncertainty Looms Over Full Recovery

Industry experts and analysts are closely monitoring the situation, given Rumaila’s crucial role in Iraq’s export-driven economy.

The loss of 300,000 bpd could have significant implications, particularly amid ongoing global energy supply concerns and Iraq’s commitments to OPEC production quotas.

The oil ministry has yet to provide an official recovery plan, leaving market watchers uncertain about the timeline for restoring full capacity.

Any prolonged disruption at Rumaila could impact Iraq’s export revenues and its ability to meet international crude demand.

As investigations into the fire’s cause continue, stakeholders will be looking for reassurances from the Iraqi government and the joint venture partners managing the field.

The focus will now be on minimizing downtime and ensuring that Rumaila returns to peak production levels as soon as possible.

This article was created using automation technology and was thoroughly edited and fact-checked by one of our editorial staff members