Iraq doesn't expect to resume production from the northern Qayyara oil region before the capture of nearby Mosul from Islamic State, an oil ministry spokesman said on Tuesday.

COMMERCIAL BREAK
SCROLL TO CONTINUE READING

The region's two main fields, Qayyara and Najma, used to produce up to 30,000 barrels per day of heavy crude before it fell under control of the ultra-hardline militants two years ago. It has also a small refinery to process some local oil. "The rehabilitation process cannot resume unless the security situation improves with the conclusion of the battle for Mosul" some 60 kilometres north of Qayyara, oil ministry spokesman Asim Jihad told Reuters.

The Iraqi army took Qayyara back recently and oil ministry services started putting out fires at wells caused by insurgents as a tactic to escape air surveillance and hamper the progression of Iraqi forces. The oil ministry also dug trenches to prevent oil spills from reaching the Tigris river, Jihad said. "They were contained," he added.

Angolan oil company Sonangol pulled out from an agreement to increase output at the Qayyara fields in 2014, citing the mounting security risk. Iraq, OPEC's second-largest producer after Saudi Arabia, pumps most of its crude from the southern region. The nation has an average daily output of 4.6 million barrels per day.

Iraqi Prime Minister Haider al-Abadi expects Mosul to be retaken in 2016, effectively defeating Islamic State (ISIS) in Iraq. The group's self-proclaimed "caliphate" extends over the border to include parts of eastern Syria.