Baghdad (Platts)--28Nov2012/624 am EST/1124 GMT

Iraq's oil production fell sharply in October to 3.035 million b/d, a 200,000 b/d decline from September output of 3.235 million b/d although oil exports rose slightly to 2.624 million b/d, a new post-1990 record, oil ministry figures obtained Wednesday by Platts showed.

The fall in October production was due mainly to a steep decline in output from southern oil fields that are under the jurisdiction of the state-owned Iraqi South Oil Company and include the super major fields of Rumaila, West Qurna 1 and Zubair. The fields are being developed by consortiums led by BP, ExxonMobil and Eni, respectively.

The three fields account for the bulk of oil produced from the south. The ministry gave no reason for the fall in output.

The ministry figures did not give a breakdown for each field but showed that output from these three fields fell by a cumulative 224,000 b/d to 1.978 million b/d from 2.201 million b/d in September.

Total output from southern oil fields, including the Meissan fields, which incorporate the Halfaya field, fell to 2.180 million b/d from 2.407 million b/d. The Halfaya field, which began producing in the middle of this year, fell to 202,000 b/d from 206,000 b/d in September.

October production from northern fields, however, rose by 27,000 b/d to 855,000 b/d from 828,000 b/d in September.

The figure includes 568,000 b/d from the giant Kirkuk oil field and other fields managed by the North Oil Company, with the semi-autonomous Kurdistan region contributing 146,000 b/d and the Midland Oil company, which manages the East Baghdad and Ahdab oil fields in central Iraq, making up the total with 146,000 b/d.

Although Al-Ahdab production is counted as northern production, it is exported from the south.

Iraqi crude oil exports in October registered hit their highest level since the August 1990 invasion of Kuwait. Exports totaled 2.624 million b/d, a rise of 26,000 b/d over September exports of 2.598 million b/d.

Southern exports in October totaled 2.172 million b/d, a 6,000 b/d fall from September exports of 2.178 million b/d. The drop was due to a period of rough weather in the Gulf affecting tanker loadings.

Iraq was able to export this volume from the south despite the fall in southern production by tapping into some 3 million b/d of crude oil in storage, which had accumulated during a prolonged period of bad weather in September.

Oil exported from southern terminals in October included 25,000 b/d of fuel oil blended into the Basra crude export stream, compared with 54,000 b/d in September.

Northern exports rose by 32,000 b/d in October to 452,000 b/d from 420,000 b/d in September. Exports from the Turkish Mediterranean port of Ceyhan accounted for 442,000 b/d of the total, with the remaining 10,000 b/d shipped by tanker trucks to Jordan.

Kirkuk crude from the north included 78,000 b/d of fuel oil and natural gasoline produced blended with the export blend compared with 72,000 b/d in September.

Northern production and exports have been rising since the Kurdistan Regional Government resumed oil exports in early August as a goodwill gesture to Baghdad to try to resolve a dispute over payment to foreign contractors.

The KRG and the federal government signed an agreement September 13 whereby the KRG agreed to supply 140,000 b/d for export in the second half of September and 200,000 b/d in the remaining months.

In response, Baghdad agreed to release around $850 million in overdue payments to the KRG. The first tranche of $540 million was made during the first half of October, with the second tranche expected to be paid in early 2013.

However, the KRG supplied only 146,000 b/d for export through the federal pipeline system in October, slightly above the 113,000 b/d exported in September but still below the volumes agreed with Baghdad.

Iraqi deputy prime minister for energy, Hussein al-Shahristani, said in London earlier this month that there would be no second payment to Erbil because the KRG had failed to honor its commitments.

Iraq, which relies almost exclusively on oil exports for its revenues, earned a total $8.578 billion from oil sales in October, a rise of $207 million over September revenues of $8.371 billion, according to the State Oil Marketing Organization.

This rise was due to the increase in export volumes despite a slight fall in the composite average price of Iraqi crude oil to $105.5/barrel in October from $107.6/b in September.

Internal supply rates to local refineries and power stations in October totaled 637,000 b/d, compared with 661,000 b/d in September and the 2011 average of 627,000 b/d. Out of the total, 56,000 b/d was supplied to power stations and the rest to refineries.

--Faleh al-Khayat, newsdesk@platts.com

--Edited by Kate Dourian, kate_dourian@platts.com; Jonathan Fox, jonathan_fox@platts.com

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