Energy
0

Iraq Supports Oil Output Freeze

Iraq’s production rate peaked at 4.51 million barrels per day in January 2016.Iraq’s production rate peaked at 4.51 million barrels per day in January 2016.

Iraqi Prime Minister Haider al-Abadi announced on Tuesday that the country would support a freeze in oil production during the next meeting of the Organization of Petroleum Exporting Countries in September.

“We are with freezing production at the OPEC meeting," he told reporters at a news conference in Baghdad, Oil Price reported.

The organization will meet informally in Algiers on the sidelines of the International Energy Forum.

The meeting will be newly-appointed Oil Minister Jabar Ali al-Luaibi’s first IEF event representing Iraq as the second largest oil producer in OPEC after Saudi Arabia.

Al-Luaibi called on international firms operating in Iraq to ramp up production in order to “boost national revenue”, according to an email obtained by Bloomberg last week.

Any ramp-up in production before the meeting would give Iraq leverage to freeze output at a higher production level during the OPEC summit. The nation’s oil production has been slowly declining since the beginning of this year.

Iraq’s production rate peaked at 4.51 million barrels per day in January 2016 —a month before barrel prices crashed to $26.21. Last month, Iraqi fields produced 4.36 million barrels a day.

The Iraqi government and the Kurdistan Regional Government have been embroiled in an oil war against each other and against the Islamic State.

Qayyara’s oilfields were captured late last week, and Iraqi forces are now trying to complete an offensive to recapture nearby Mosul—the largest city still under IS control —in the coming weeks.

Baghdad and the KRG have been at odds over the terms of oil revenue-sharing deal that would allow the unilateral export of oil from Iraq. Currently, Kurdistan exports approximately 500,000 bpd of oil via Turkey, to Baghdad’s dismay.

While Iraq may have decided to freeze its oil output for now, it will no doubt continue to pursue its ambitious target of 6 million barrels per day in 2020. A goal that seems out of reach for OPEC’s No.2 that continues to struggle to pay the international oil companies it works with while fighting a war with IS militants.

Financialtribune.com