* Exports to drop by 500,000 bpd in Sept due to port work
* Iraq's SOMO suggests cuts in Basra Light loadings of 25pct
* Start-up of Shell-operated Majnoon oilfield delayed to Oct
* Baghdad expects 400,000 bpd production rise by end-2013
By Ahmed Rasheed
BAGHDAD, Aug 7 (Reuters) - Iraq's oil exports are stagnatingcompared with a year ago and are set to fall sharply next monthwhile major work is carried out at its vital southern exportterminals, industry sources said.
Infrastructure and security problems are making Iraqstruggle to keep pace with last year's rates, although Baghdadis confident of a big rise in production by the end of the yearafter the start-up of the giant southern Majnoon oilfield.
Iraq's overall exports of 2.324 million barrels per day(bpd) in July were down a small fraction on June, Iraq's oilministry spokesman Asim Jihad said on Wednesday. They are justbelow levels a year ago.
Southern Basra Light exports are expected to drop by 500,000bpd in September while metering equipment is installed at theterminal.
Iraq's major customers say state oil marketer SOMO issuggesting cuts next month of 25 percent in liftings of the mainBasra Light grade, which have been running at around 2.1 mlnbpd.
Because there is a lack of storage capacity in the south,the export cut will force a decrease in production on nearly thesame scale.
Output of crude oil in 2013 has averaged 2.9 million bpd -flat on last year - although flows climbed to 3.25 million bpdat the start of August, Jihad said.
OPEC's second biggest producer expects output to rise by400,000 bpd by the end of this year due to the start up of theRoyal Dutch Shell -operated Majnoon oilfield in southernIraq and other smaller sources, Jihad said.
The government has set a production target of 3.4 millionbpd for end-2013, down from an initial 3.7 million bpd. If theMajnoon and other increases are realised, Iraq will exceed thereduced target rate by the end of the year.
Unless there is a big burst of production from the oilfieldstart-ups, however, Baghdad will report an overall annual outputdecline for 2013 - its first after two years of robust gains -industry sources said.
"Production from the Majnoon oilfield should start inOctober," Jihad said. The oil minister had previously given Julyas the start date.
After idling for years due to wars and sanctions, Iraq'soutput began to rise in 2010 after it secured service contractswith large oil groups such as BP, Shell, Eni andExxon Mobil.
Since then, output has risen by 600,000 bpd to around 3million bpd thanks to higher flows from the giant southernfields of Rumaila, West Qurna-1 and Zubair.
To continue its production increases, Iraq will need tostart up other southern fields apart from Majnoon, such as WestQurna-2, run by Russia's Lukoil. Garraf, also in thesouth, and Badra - farther north - will also contribute.
