Commercial traffic resumes on Iraq's Shatt al-Arab

Commercial traffic has resumed on the strategic Shatt al-Arab waterway after 31 years, with the official opening of a port for oil giant Shell, an Iraqi official said on Tuesday. Part of the 200-kilometre-long (120 miles) waterway forms a section of the border with Iran. An unresolved boundary dispute was a major reason cited by now-executed dictator Saddam Hussein for the 1980-88 war with Iran, which resulted in the waterway's closing. "The Shatt al-Arab is reborn again after being closed for 31 years," Mehdi Badah Hussein, the head of the joint committee to develop Majnoon oil field, told AFP at a ceremony to open the port. "There are other harbours on the Shatt al-Arab, but commercially, this is the first time Iraq succeeded in turning the Shatt al-Arab into a maritime passage which will help in transporting heavy equipment," Hussein said. Dia Khalil, an Iraqi engineer and member of the joint committee, told AFP the journey up the Shatt al-Arab to the new port is about 80 kilometres (about 50 miles), and that ships will pay customs fees in Umm Qasr to the south before heading to the new harbour. A consortium of Anglo-Dutch oil giant Shell and Malaysia's Petronas signed a contract with Iraq in January 2010 to operate the enormous Majnoon field. "We believe this is the first jetty harbour to bring in ships that can come from all over the world back off the river with heavy equipment in 31 years," Shell Majnoon general manager Ole Myklestad told AFP. "This is very important," Myklestad said during the ceremony, as it is the first time in decades that a commercial harbour was opened here. "I hope that ships leaving this harbor in the future will also be carrying goods," he said. Myklestad said the first ship arrived to the harbour on January 5. Asked by AFP if the port will be used to export oil, he said no, as that will be done by pipeline. "This is a happy day," said Khalaf Wadi, deputy manager of Iraq's Southern Oil Co, which is partnered with Shell and Petronas. "We are officially opening the first commercial jetty in the Shatt al-Arab since the start of the war with Iran." The port's main function is to facilitate the transportation of equipment to the massive Majnoon oil field. But ordinance present in the field poses a danger. Simon Mawdslag, the Explosive Remnants of War Coordinator for Shell, said that "over 4,000 individual items of ordinance" have been located and removed from a roughly eight square kilometre area -- the only part cleared so far. "These items are handed over to the Iraqi armed forces and their explosive ordinance disposal team, they actually do the destruction of the items," he said. Iraq's income from oil sales jumped by nearly 60 percent in 2011 on the back of higher crude prices and increased exports, according to the oil ministry. Oil sales account for the vast majority of Iraqi government income and around two-thirds of gross domestic product. The country exported an average of 2.1 million bpd in 2011, according to Oil Minister Abdelkarim al-Luaybi.