Dec. 13 (UPI) -- London-listed oil and gas services company Petrofac said Wednesday it secured a $160 million contract to help overhaul a southern Iraqi oil port.
The company said it secured the contract from Basra Oil Co., known previously as South Oil Co., for an expansion project from a terminal about 40 miles off the southern coast that's responsible for nearly all of what Iraq exports.
The contract involves infrastructure that facilitates crude oil tankers waiting to load oil, more than 180 miles of new pipelines and a mile of associated hose infrastructure. To date, the company said it's facilitated the export of more than 2.2 billion barrels of oil for Iraq.
Petrofrac secured a $70 million contract from the Iraqi company early this year. The scope of that arrangement expanded on a six-year agreement to provide support for the offshore international crude oil export expansion production facility in the country's south.
That contract, awarded in April, followed a declaration of new investment opportunities for refineries in Basra.
A similar contract was awarded to Petrofac in December 2016. At the start of this December, the Iraqi Oil Ministry said the southern port at Basra recently sent out an average of 3.9 million barrels of oil per day, the highest capacity ever reached there.
Oil Minister Jabar al-Luaibi said southern exports were supported by improved market conditions as the price of oil holds above $60 per barrel.
Iraq is party to the multilateral effort led by the Organization of Petroleum Exporting Countries to balance an oversupplied crude oil market with coordinated production declines, but has historically been one of the least compliant. The agreement, recently extended to the end of 2018, is credited with setting a floor under the price of oil at $50 per barrel.
A survey of OPEC results from commodity pricing group S&P Global Platts said Iraq averaged 4.38 million barrels per day in oil production in October, a decline of 120,000 barrels per day. In terms of compliance, Platts found in an emailed report that Iraq, one of the largest producers in OPEC, was over its allocation by about 80,000 barrels per day.