Home / Oil & Energy / Oil & Companies News / Iraq lowers oil output from southern fields in line with OPEC+ cuts: minister

Iraq lowers oil output from southern fields in line with OPEC+ cuts: minister

Iraq asked international oil companies operating some of its biggest fields in the south to cut their output for the country to adhere to the OPEC+ quota production cuts, the country’s oil minister said March 19.

The 23-member OPEC+ alliance is currently in the middle of trimming its collective output by 2 million b/d, an agreement that kicked off in November and will be carried out through the end of 2023. Iraq has a quota of 4.431 million b/d under the Oct. 5 agreement.

“We forced some companies (with technical service agreements) in the south to lower production in order to adhere to the OPEC+ decisions,” Hayan Abdul-Ghani said in Baghdad, state-run Iraqi New Agency reported on March 19.

ExxonMobil, Lukoil, Eni and BP are some of the IOCs operating the country’s giant southern oil fields.

The ministry has plans to boost its oil exports if OPEC+ decides to ramp up its production, the minister added.
OPEC’s second biggest producer pumped 4.33 million b/d in February, down from 4.48 million b/d in January, according to the latest Platts survey by S&P Global Commodity Insights.
New licenses
A key OPEC+ committee, co-chaired by Saudi Arabia and Russia, is due to meet on April 3 to discuss the group’s output cuts.

OPEC+ meetings in December and February have seen the alliance stick to the cuts amid the backdrop of Russia’s planned 500,000 b/d cut in production in March in retaliation to Western sanctions on its energy sector following its Feb. 24 invasion of Ukraine in 2022.

On Dec. 5, the G7 countries imposed a $60/b cap on Russian oil in parallel with the start of an EU ban on crude imports from Moscow. The G7 on Feb. 5 slapped a price cap on Russian crude products also to coincide with an EU ban on these oil derivatives.

The ministry plans to offer new exploration and production licenses this year as it seeks to boost the country’s oil and gas output, Abdul-Ghani said.

In February, the ministry signed production agreements with two companies from China — Geo-Jade and Hong Kong-listed United Energy Group — and one from the UAE, Sharjah-based Crescent Petroleum — which won contracts to develop six border oil and gas fields that were awarded in the fifth licensing round in April 2018.

The ministry plans to offer five other border fields very soon, as well as 10 “promising” exploration blocks, mostly holding natural gas resources, the minister said.

Lowering Iranian imports
Iraq wants to boost its gas output to lower dependence on Iranian gas and electricity imports, which are subject to US sanctions.

Most of Iraq’s gas output, which is produced with oil, is burned, making the country the world’s second-worst flaring nation after Russia, according to the World Bank.

Iraq, which only captures 56% of its associated gas, is going to focus on boosting its gas output over the next five years to lower its dependence on Iranian imports, the minister said.

Iraq, which imports half of its gasoline requirements, also wants to reduce the country’s reliance on oil product imports, Abdul-Ghani said.

The country’s 140,000 b/d Kerbala refinery, which is about to start up, will help meet more than 50% of the country’s gasoline imports, he added.

Iraq continues to import gasoline and gasoil to fulfill its domestic needs as much of its existing refineries are old and dilapidated or are still being rehabilitated. Many refineries were damaged during the 2014-17 war with the Islamic State group.

Iraq is open to attracting foreign investment for six new refineries with a total combined capacity of 570,000 b/d, Abdul-Ghani said March 15.
Source: Platts

Recent Videos

Hellenic Shipping News Worldwide Online Daily Newspaper on Hellenic and International Shipping