PETROLEUM ARGUS
Iraq sets 4.7mn b/d floor in talks over Opec deal
Iraq considers 4.7mn b/d its base crude production figure as Opec members discuss plans to limit production, the country's oil minister Jabbar al-Luaibi said on 23 October.
Argus reporters met with Iraq’s oil ministry this week to discuss a breakdown of the country’s crude oil production. Iraq claims that its official production numbers are underestimated by those presented to Opec by secondary sources, including Argus. At the last Opec meeting in Algiers last month, the Iraqi oil minister Jabbar al-Luaibi was reluctant to rely on secondary source reports of Opec production as the basis for an agreement to limit output.
Opec ministers in Algeria had asked Iraq to reduce its output to 4.159mn b/d as part of a preliminary agreement to limit the group's crude oil production to 32.5-33mn b/d. Iraqi oil officials say that this is based off of the lowest monthly number reported to Opec by secondary sources in the first eight months of the year. But the lowest secondary source number during that period was 4.173mn b/d in February, which was earlier reported as 4.156mn b/d before revision.
In March, Iraq issued a revision of its official January production figure, ahead of an Opec meeting in Doha the following month, where a discussion of a production freeze was expected. The revised figure of 4.775mn b/d for January, nearly 600,000 b/d higher than the 4.183mn b/d it had earlier reported, matches the level Iraq reported officially to Opec for September.
While the oil ministry admitted in Baghdad that it does not have access to official production figures from the ministry of natural resources in the semi-autonomous Kurdish region, officials maintained that production from the country's federal regions extending from Kirkuk in the north to Basrah in the south amounted to 4.228mn b/d in September. This includes production from the Bai Hassan and Avanah dome, which produce a total of about 250,000 b/d and which the semi-autonomous Kurdistan Regional Government (KRG) took over from state-owned North Oil (NOC) in 2014.
Despite questions over Kurdistan's production figures, director general of state-owned marketer Somo Falah al-Amri said that there was "no doubt" that Iraqi production had exceeded 4.7mn b/d in September.
Al-Amri said that Iraq would not "go back" or reduce production from 4.7mn b/d, "whether by Opec organisation or by anybody else," adding that it was a matter of "sovereignty".
Iraq entered Opec discussions in Algeria with the aim of joining Nigeria, Libya and Iran in their exemption from the mooted production limits. Iraq deserved the exemption, al-Luaibi said, because over ten years of war and economic crises had drained the country's revenues. Additionally, Iraq is currently fighting a "vicious" war against the extremist ISIS group "on behalf of the world," said al-Luaibi.
But Opec ministers denied Iraq the right to be exempted from production limits. Al-Luaibi said that Iraq would be "flexible and lenient" and willing to support Opec in its decision to implement production limits in order to support oil prices. Opec secretary-general Mohammed Barkindo will arrive in Baghdad on 25 October for two days of meetings with al-Luaibi and Iraqi officials.
Yet al-Luaibi met this month with general managers at Iraq's provincial oil companies and members of the oil ministry to discuss a "national effort" to boost oil and gas output for the remainder of the year as well as for 2017. The oil ministry announced today its plan to launch a project to develop and produce from a range of small and medium-sized fields in Basrah and Maysan.
Al-Luaibi added that the Common Seawater Supply Project is expected to come on line next year and will be completed over three phases. Water injection capacity is necessary to help maintain crude production capacity at key southern fields. But al-Luaibi added that the ministry has revised down the water injection project's production target, adding that it will not achieve "its original level of outcome," although he did not offer a specific figure.
Argus reporters met with Iraq’s oil ministry this week to discuss a breakdown of the country’s crude oil production. Iraq claims that its official production numbers are underestimated by those presented to Opec by secondary sources, including Argus. At the last Opec meeting in Algiers last month, the Iraqi oil minister Jabbar al-Luaibi was reluctant to rely on secondary source reports of Opec production as the basis for an agreement to limit output.
Opec ministers in Algeria had asked Iraq to reduce its output to 4.159mn b/d as part of a preliminary agreement to limit the group's crude oil production to 32.5-33mn b/d. Iraqi oil officials say that this is based off of the lowest monthly number reported to Opec by secondary sources in the first eight months of the year. But the lowest secondary source number during that period was 4.173mn b/d in February, which was earlier reported as 4.156mn b/d before revision.
In March, Iraq issued a revision of its official January production figure, ahead of an Opec meeting in Doha the following month, where a discussion of a production freeze was expected. The revised figure of 4.775mn b/d for January, nearly 600,000 b/d higher than the 4.183mn b/d it had earlier reported, matches the level Iraq reported officially to Opec for September.
While the oil ministry admitted in Baghdad that it does not have access to official production figures from the ministry of natural resources in the semi-autonomous Kurdish region, officials maintained that production from the country's federal regions extending from Kirkuk in the north to Basrah in the south amounted to 4.228mn b/d in September. This includes production from the Bai Hassan and Avanah dome, which produce a total of about 250,000 b/d and which the semi-autonomous Kurdistan Regional Government (KRG) took over from state-owned North Oil (NOC) in 2014.
Despite questions over Kurdistan's production figures, director general of state-owned marketer Somo Falah al-Amri said that there was "no doubt" that Iraqi production had exceeded 4.7mn b/d in September.
Al-Amri said that Iraq would not "go back" or reduce production from 4.7mn b/d, "whether by Opec organisation or by anybody else," adding that it was a matter of "sovereignty".
Iraq entered Opec discussions in Algeria with the aim of joining Nigeria, Libya and Iran in their exemption from the mooted production limits. Iraq deserved the exemption, al-Luaibi said, because over ten years of war and economic crises had drained the country's revenues. Additionally, Iraq is currently fighting a "vicious" war against the extremist ISIS group "on behalf of the world," said al-Luaibi.
But Opec ministers denied Iraq the right to be exempted from production limits. Al-Luaibi said that Iraq would be "flexible and lenient" and willing to support Opec in its decision to implement production limits in order to support oil prices. Opec secretary-general Mohammed Barkindo will arrive in Baghdad on 25 October for two days of meetings with al-Luaibi and Iraqi officials.
Yet al-Luaibi met this month with general managers at Iraq's provincial oil companies and members of the oil ministry to discuss a "national effort" to boost oil and gas output for the remainder of the year as well as for 2017. The oil ministry announced today its plan to launch a project to develop and produce from a range of small and medium-sized fields in Basrah and Maysan.
Al-Luaibi added that the Common Seawater Supply Project is expected to come on line next year and will be completed over three phases. Water injection capacity is necessary to help maintain crude production capacity at key southern fields. But al-Luaibi added that the ministry has revised down the water injection project's production target, adding that it will not achieve "its original level of outcome," although he did not offer a specific figure.
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