Iraq presses for data to prevent resale of Basra crude

Several oil sources said yesterday that the Iraqi Petroleum Marketing Company (SOMO) had asked its customers to provide data to determine if its cargoes of Basrah ore were finally consumed, in order to monitor buyers who might have violated their purchase contracts.
Iraq, the second largest producer of the Organization of Petroleum Exporting Countries (OPEC), is currently reducing the sale of its long-term oil sales to buyers' refining systems, sources said, but the company has not applied this rule in recent years to facilitate the sale of its growing supplies and earn a share. Market of other producers.
Sumo now wants to eliminate resale and convert some shipments sold under long-term contracts into its own business to maximize profits from its oil sales.
The review of Basrah oil resale comes before Sumo's decision next month to determine the amount of oil to be delivered to fixed-term buyers in 2019.
Bassorah oil sales, which are sold by companies holding interests in the development of oil fields in Iraq, are not subject to any restrictions as to their destination and can be sold anywhere in the world. Among the British producers BP, Russian Lukoil, Petronas of Malaysia and PetroChina of China.
"It's a contractual obligation for customers not to resell oil without Sumo's prior approval," said an informed source.
Baghdad is planning to increase Basrah's oil exports from southern ports to 4 million bpd in the first quarter of 2019, compared with a current record of 3.62 million bpd.
Somo is expected to return some supplies to new partners such as Shenhua, China, led by the government, to boost trade with Beijing, the largest oil importer and largest Iraqi customer.
"As for the quantities for the coming year, that they be sent to Shenhua or to a company, this will be the subject of a debate and the decision will be taken in November "said the source informed.
Basrah's long-term oil demand has outstripped supply in recent years, prompting Sumo to change its annual allocations.
The sources said that while Somo signed long-term agreements with commercial companies, they are now only tied to specific agreements with companies owning their own refineries.
This is similar to the time-limited elements in the fixed-term contracts of other producers in the Middle East, including KPC and Abu Dhabi National Oil Company.