Iraqi Kurds, Foreign Firms Agree to Cut Oil Output

Iraq said most international oil companies working in the country, along with the semi-autonomous Kurdish region, have agreed to cut crude output to fulfill an OPEC accord.

Iraq is fully committed to delivering on OPEC’s Nov. 30 agreement to reduce supplies, Oil Minister Jabbar al-Luaibi said in Cairo, Bloomberg reported.

“Kurdistan is within Iraq and we are in agreement,” said al-Luaibi.

The Kurdistan Regional Government, which accounts for about 12% of the nation’s output, said on Dec. 5 it did not expect to make significant output cutbacks to satisfy the OPEC accord.

The Organization of Petroleum Exporting Countries resolved on Nov. 30 to reduce production by 1.2 million barrels a day in an effort to end a three-year supply glut and buoy prices. The plan was widened on Dec. 10 when 11 non-members including Russia and Kazakhstan promised to join in the cuts.

Iraq, OPEC’s second-biggest producer after Saudi Arabia, pledged to trim output by 210,000 barrels a day, or 4.5% of its total production. The country initially resisted the plan to reduce supply, saying it deserved to be exempt while battling the so-called Islamic State militants and reviving its oil industry after years of conflict and sanctions.

Iraq is in talks to supply crude to Egypt, al-Luaibi said. Saudi Arabian Oil Co., known as Saudi Aramco, has halted shipments of oil products to Egypt since October, forcing the Arab world’s most populous nation to buy fuels on global markets at a higher cost.

Separately, Iraq’s oil-rich Kirkuk province, under the protection of the Kurds since 2014, said it is willing to reduce crude production if required.

The northern province is prepared to reduce output if the decrease is “proportional” with the country’s other regions, Ahmed Al-Askari, head of Kirkuk province’s oil, energy and industry committee, said by phone.