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Iraq is committed to OPEC+ cuts but has difficulties complying

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Iraq selected companies to develop the fields in a licencing round last year, but the contracts were not ratified by Iraq authorities when a new administration took over and remain in limbo.

Wednesday 11, September 2019

Iraq’s Oil Minister said that the country is committed to curbing its oil output in compliance with the Organisation of Petroleum Exporting Countries (OPEC) agreement, but persistent divisions with the regional Kurdish administration over exports are making this difficult, reported Bloomberg.

Thamir Ghadhban, the Iraq Oil Minister, said, “While Iraq and the autonomous Kurdish region are cooperating on exports of oil produced at Kurdish fields, we still have issues.”

Iraq, including the self-ruling Kurdish region, has about five million barrels a day of oil output capacity. Last month, its production increased by about 30,000 barrels a day to 4.78 million barrels a day. Ghadhban said that Iraq increased output over the summer to meet seasonal demand for power.

Crude production across the entire OPEC group rose by 200, 000 barrels a day in August, the first increase since the oil producing group and its allies started a new round of output cutbacks at the start of 2019.

The Iraqi central government in Baghdad is ‘relaxing’ development of major oil fields, including West Qurna 2, Rumaila and Zubair, to help meet its pledged OPEC+ output cuts, said Ghadhban.

Ghadhban added that Iraq will cut production from fields that the government runs and not from those where foreign companies are working. He has also ordered a decrease in the country’s oil exports.

Current talks on the sharing of oil revenue between Baghdad and the Kurdistan Regional Government will succeed where previous attempts failed because people have got wiser, added Ghadhban.

Kurdistan pumped and exported crude on its own without cooperating with Baghdad and what they ended up with was a hefty debt, Ghadhban said.

OPEC’s second-biggest producer plans to diversify its oil-export routes, including building a pipeline from Basra to Aqaba to Jordan. The country also aims to replace a war-damaged crude pipeline running from its northern fields to Turkey.

 

TAGS : OPEC, Basra, Kurdistan Regional Government, production cuts, Aqaba

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