RIYADH, Oct 6: With the major oil pipeline sabotaged, and oil prices remaining bullish, Iraq is reportedly working on alternative routes to export its crude. Amid speculation of a planned strike in Nigeria and a storm that shut oil ports in Mexico may reduce supplies going into the northern hemisphere winter, oil prices currently appear on a upswing. Oil in New York has gained almost 13 per cent since Opec announced output cuts last month of 900,000 barrels from November.

A pipeline to the south could enable Iraq to export crude either through Saudi Arabia or Iraq’s Gulf ports. A more remote option, some Iraqi oil officials told some oil companies in London last week, would be to use the Iraq-Syria pipeline. However, in view of the current US-Syria relationship, this move could be unattractive to a US administration putting pressure on Damascus over its support for militant Palestinian groups and alleged possession of weapons of mass destruction.

Talks last week between senior European oil executives and Iraqi oil officials in London has reportedly left western buyers of Iraqi crude more confident that exports would soon recover closer to pre-war levels.

But the plan to divert oil from the Kirkuk field, in northern Iraq, through a strategic pipeline to the south confirms fears that the damage inflicted on the pipeline to Turkey is greater than previously admitted. It also helps explain the surprise decision taken by Opec oil ministers last month to cut production quotas, partly due to worries that rising Iraqi production would force international prices down. Iraq increased production to an average of 1.45m barrels per day last month - up 500,000b/d from August, but well below pre-war production of 2.8mb/d.

“It’s hard to estimate exact production because they are pumping some excess oil back into the ground, but it would be quite significant if they reversed the flow of this strategic pipeline,” said Leo Drollas, an analyst with the Centre for Global Energy Studies. “The September figures are in line with the recovery pattern, but if they want to go to 1.8m b/d from the south, they would have to bring oil down from the north.”

Sabotage has badly hit the supply of oil from the Kirkuk region, which, before the war, accounted for close to 50 per cent of Iraqi exports. Reuters quoted oil ministry sources in Baghdad warning that alternatives to the pipeline running to Turkey would not be operational for 6-12 months. Nevertheless, oil executives meeting officials in London said Iraq was confident about increasing export volumes by using new routes. The message was “back to business as usual”, said one oil executive.

“They (the Iraqi officials) look more relaxed,” said another oil executive, who met Mohammed al-Jibouri, the head of Somo, the marketing arm of the Iraqi oil ministry. “But privately they acknowledge serious problems with Kirkuk oil.” The London meeting is believed to be the first round of discussions among Iraqi oil officials and western oil companies outside the Middle East since the war began in March.

Previously, Somo officials have met oil company representatives in Dubai, Kuwait City and Baghdad.

Among the oil companies at the London meeting were ChevronTexaco, Total, Repsol YPF, Cepsa and Vitol. Oil industry insiders say the event shows a growing confidence in Baghdad about oil exports.

In the meantime, the first tanker set off from a Cameroon port with crude from a massive, $3.7 billion ($A5.41 billion) World Bank-backed pipeline, launching an ambitious project to help develop West Africa as an alternative to Mideast oil, energy analysts believe. The 1,075-km pipeline from the landlocked nation of Chad to the Atlantic ports of Cameroon represents the World Bank’s largest-ever investment in sub-Saharan Africa. A tanker carrying the first 950,000 barrels left the Cameroon port of Kribi for world markets on Friday, Cameroon’s National Oil Transportation and National HydroCarbons told The Associated Press. The first shipment comes two months after the first oil trickled into the pipeline from Chad’s southern town of Doba.

Conceived in 1996 with support from the then-US President Bill Clinton’s administration, the pipeline was developed by an international consortium, with ExxonMobil holding a 40 per cent stake, Malaysia’s Petronas 35 per cent, and ChevronTexaco 25 per cent.

US President George W. Bush’s administration, hopeful of lessening US dependence on Mideast oil, has pushed development of West Africa’s oil. West Africa, led by Nigeria, already supplies the United States with about one-fifth of its oil — roughly equal to Saudi Arabia’s share of the US market.

The World Bank, in its first foray into supporting oil production, supplied three per cent of the financing for the pipeline. It is part of a strategy to get developing countries to use revenues from their own resources to alleviate poverty. Chad and Cameroon signed a treaty for the construction of the pipeline in 1996. Construction began in 2000. The project included development of 300 wells in the Doba oil fields in southern Chad. The oil fields are estimated to hold reserves of more than 900 million barrels.