Iraq reiterates its commitment to Opec agreement

Abu Dhabi: Iraqi officials reiterated on Friday that they are cutting production in line with the Opec deal and already informed the Opec committee about the measures being undertaken by the government to comply with the agreement.

“Iraq is implementing production cuts. There are rumours that we are not cutting production. We are doing our best and we continue to reduce production to meet Opec target,” said Dr Falah Al Amri, Iraq’s Opec governor and director-general of State Oil Marketing Organisation of Iraq’s Ministry of Oil, speaking to reporters on the sidelines of Atlantic Council Energy Forum in Abu Dhabi on Friday.

He said letters have already been sent to international oil companies operating in Iraq to reduce output.

“These letters are being sent to Opec secretariat and committee to show our commitment to the deal. We will also ask international companies to confirm that they received letters.

“Iraq production reduction will be more than 200,000 barrels per day by the end of the month. So far, it (the output cut) has been between 170,000 and 200,000 [barrels].”

Iraq is the second largest producer of crude oil within Opec and the country’s production reached 4.5 million barrels per day in November, according to the Opec monthly report released in December.

Iraq oil minister Jabbar Al Luaib also said on Thursday that the country is moving ahead with production cuts to comply with the agreement reached between Opec and non-Opec members on December 10.

Speaking at the same conference, Opec secretary-general Mohammad Barkindo said there is a need to solidify the global platform of 24 countries that reached the agreement to cut output last month in Vienna.

“Like we say in football, this is the half time for the deal. Going forward, we need to solidify the deal and intensify dialogue with oil consuming countries like the US. Whatever is good for Opec is good for the US and for the global economy,” he said referring to a question on US oil production.

Meanwhile, a top executive of International Energy Agency (IEA) said shale oil production from the US will go up due to the recent Opec agreement.

“Forty-eight new rigs have been activated in the month of December in the US as oil prices go up. We may see more oil from the US companies in the coming days,” said Dr Fatih Birol, executive director of IEA.

He also said smaller producers like China and Columbia might increase their oil output due to increase in oil prices following the agreement.

“Chinese oil production declined by half a million barrels in the last one-and-a-half years due to low oil prices. With oil prices going up, Chinese oil production is expected to go up.”