Iraqi workers force Baiji refinery closure over product price row

Baghdad (Platts)--28Dec2005

Workers at Iraq's 350,000 b/d Baiji refinery have forced a halt in
operations from Dec 21 in a protest over the government's decision to raise
refined product prices, senior Iraqi oil ministry official said Wednesday.

     "The refinery has been shut since Dec 21," a senior ministry official
told Platts. "The refinery was shut down by its management and its workforce
for protesting the price hike of oil products."

     The government announced Dec 18 an anticipated increase in the price of
fuels to take effect from Jan 1. Iraq fuel prices are highly subsidized by the
government.

     The workers have prevented the pumping and loading of products from the
refinery, leading a build in stock levels above storage capacity and forcing
operations to be halted for an indefinite period of time.

     "Negotiations are going on with the workforce to allow the loading and
the pumping of the products," the official added.

     Prior to the closure, the refinery had been running at about 60% of its
full capacity, with ongoing attacks against the northern pipeline network and
infrastructure problems limiting refining capacity.

     The crude supplies normally pumped to the country's largest refinery have
been redirected along the 900,000 b/d export pipeline to the Turkish
Mediterranean port of Ceyhan, the official said. 

     Kirkuk crude flows to Ceyhan resumed Friday but where halted Saturday and
by Tuesday continued to remain off line. Kirkuk crude stocks in Ceyhan have
climbed to 1-mil bbl.

     Iraq's oil minister Ibrahim Bahr al-Ulum has taken a one-month leave of
absence in protest over the price hike, leaving the affairs of the ministry in
the hands of deputy prime minister Ahmed Chalabi.

     Chalabi started work at the ministry Tuesday. 

     Ulum had threatened Dec 19 to resign unless the government canceled a
decision to increase gasoline prices, a move that has prompted demonstrations
throughout the country.

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