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Iraq To Remain Committed To OPEC Cuts Despite Reaching 5 Million Bpd Production Capacity


01/15/2018


Iraq To Remain Committed To OPEC Cuts Despite Reaching 5 Million Bpd Production Capacity
Iraq would remain committed to the targets of output that it has agreed to under the global pact to cut supplies despite the fact that the OPEC member’s output capacity is closing in on a total of 5 million barrels per day, said Iraqi Oil Minister Jabar al-Luaibi on Saturday.
 
Despite an uptick in the prices of oil, there should be continuance of the supply cut agreement between OPEC and non-OPEC producers, Luaibi said.
 
“The market now is not 100 percent stable,” he said at an industry conference in Abu Dhabi. He added that despite the fact that there might be some fluctuations, there should be some sustainability in the current oil prices.
 
There was a jump of 4.7 per cent in the price of U.S. West Texas Intermediate (WTI) crude after it touched the highest point since late 2014 at $64.77 on Thursday while there was a rise of 3.3 per cent in Brent crude this week.
 
The global oil cut agreement is slated to last till the end of 2018 and was struck between the Organization of the Petroleum Exporting Countries and Russia where all the parties agreed to limit production by cutting 1.8 million barrels per day of crude.
 
4.3 million barrels per day is the current production rate in Iraq, Luaibi said.
 
Luaibi said that “so far there is a balance” in the oil market, notwithstanding the enhancement in the production of oil from the United States.
 
“We are watching the market and the market is okay in terms of supply and demand balance. There’s still a gap, inventories are still high. The inventory level will decrease gradually and we will see how things will go,” he told reporters.
 
To make use of gas from Basra, Maysan and Nassiriyah southern provinces, the Iraqi government has plans to complete three agreements with international gas companies by mid-2018, Luaibi also said.
 
The country plans to “reach zero gas flaring” by 2021, he said.
 
There is lack of facilities and infrastructure in Iraq necessary to capture and process the gas produced alongside crude oil into fuel that is usable and hence the country is forced to burn some of it.
 
A joint venture between Iraq’s state-run South Gas Co., Shell and Mitsubishi, the Basrah Gas Company, is the only company that is able to process gas in Iraq.  
 
Iraq is attempting to enhance its income from oil and gas production and export and it is revenue from this segment that forms t he majority of the finances required for almost all its public budget. The country is also the second largest oil producer after Saudi Arabia with in the OPEC.
 
(Source:www.reuters.com)


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