By Aref Mohammed
BASRA, Iraq (Reuters) - Oil exports from Iraq's southern ports have averaged 3.162 million barrels per day (bpd) so far this month, down slightly from May due to maintenance work and rising demand for fuel oil used in power generation, a senior oil official said.
The exports, including 850,000 barrels of Basra Heavy, are expected to hold steady through the end of the year, Hayan Abdulghani Abdulzahra, the head of state-owned South Oil Company (SOC), told Reuters in an interview late on Sunday.
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"With the start of summer, demand for crude oil from power stations and refineries has increased to around 550,000 barrels per day, and this comes at the expense of exports," he said.
Power stations and refineries had been using 400,000 bpd before high temperatures boosted electricity consumption, he said.
OPEC's second-largest producer aims to increase its southern oil storage capacity to 14 million bpd by the first quarter of 2018, from 11.5 million currently, to help cope with export bottlenecks caused by bad weather and to absorb an expected rise in output, Abdulzahra said.
The country plans to bring a fourth single point mooring (SPM) facility online by mid-2017 to boost export capacity from southern terminals to 4.5 million bpd from 3.6 million currently, he said.
Iraq last year was OPEC's fastest source of supply growth, boosting output by more than 500,000 barrels per day, despite spending cuts and conflict with Islamic State militants.
A collapse in global prices <LCOc1>, which at $47 a barrel are less than half their level of two years ago, has hit revenue for the government which relies on oil for nearly all its income.
The price drop has raised concern that Iraq's oil output growth could slow, or stall. Indeed, oil companies have warned Iraq that projects will be delayed if the government insists on drastic spending cuts this year.
Abdulzahra said more talks were needed with ExxonMobil <XOM.N> and PetroChina <0857.HK>, which Iraq approached last year about a multi-billion dollar project to boost output from Nahr Bin Umar and Artawi, two smaller southern oilfields now producing 35,000 and 17,000 bpd respectively.
"We reached an initial agreement that production from both fields should reach 550,000 barrels per day," he said, without specifying a timeframe.
SOC is seeking investments from the two companies to build infrastructure needed to raise output at fields it operates.
Most of Iraq's production comes from five giant fields. Abdulzahra said production from BP's <BP.L> Rumaila oilfield, Iraq's largest, is currently at 1.45 million bpd, more than 60,000 barrels higher than last year.
West Qurna 1, developed by Exxon Mobil, is producing 450,000 bpd, while Lukoil's <LKOH.MM> West Qurna 2 produces 405,000 bpd, he said. Output from Shell's <RDSa.L> Majnoon is at 220,000 bpd and at Eni's <ENI.MI> Zubair at 360,000 barrels.
(Additional reporting and writing by Ahmed Rasheed, editing by David Evans)