OPEC


Iraq to Follow OPEC, Reduce Oil Output

By John Lee.

Iraq’s oil ministry has said it will seek to limit oil production to 4.513 million barrels per day (bpd) for the next six months. based on the OPEC deal recently agreed.

According to a statement from the Ministry of Oil, this would be a reduction of 140,000 bpd from the reference level of 4.653 million bpd reached in October.

(Source: Ministry of Oil)

Iraq to Comply with Opec Supply Cuts

By John Lee.

Financial Times reports that Iraq will comply with OPEC-led efforts to restrict crude oil production, even as Saudi Arabia said it is striving to boost its export capacity.

It quotes Oil Minister Jabar Ali al-Luaibi [Allibi, Luiebi] as saying that Iraq’s export capacity would reach 5m bpd by the end of this year, but adding that it will comply with OPEC declarations.

December output stood at 4.4 million bpd.

(Source: Financial Times)

Mid-Yr Assessment of Oil Revenues, Budgetary Implications

By Ahmed Mousa Jiyad.

Any opinions expressed are those of the authors, and do not necessarily reflect the views of Iraq Business News.

Mid-year Assessment of Oil Export Revenues and Budgetary Implications

Iraqi data on oil exports and generated revenues for the first half of 2017 provide the material evidence to assess the impacts of the first accord of OPEC production cut on Iraq and its fiscal crisis.

During the first half of the year, Iraq’s oil export prices has been on the decline reaching the critical benchmark of $42 a barrel; deficit in oil export revenues was, partially, resulted from KRG non-compliance, and its impact on Kirkuk, with this year Budget Law, though much of that deficit was compensated by exports from the south.

And with most predictions of further decline in oil prices budgetary deficit could be deepen.

This assessment and for comparison purposes covers nine months period divided into two sub-periods: the first is pre-OPEC cut commencement, which covers the fourth quarter of 2016 (4Q2016) and the second post-OPEC cut commencement, which covers the first half 2017 (1H2017) and also the full term of first OPEC cut accord; and this second period is also divided into two quarterly periods; 1Q2017 and 2Q2017.

The paper addresses first oil price and oil exports, then assesses the budgetary implications and finally provides brief note the prospects of oil prices for the rest of the year. All data are from official/formal sources.

Please click here to download the full report.

Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.

Iraq, Algeria Discuss Oil Production Cuts

By John Lee.

Oil Minister Jabar Ali al-Luaibi [Allibi] has met with the Algerian minister of energy Mr. Nooraldeen Botarfa in Baghdad at Wednesday to discuss increasing cooperation between the two countries in the oil sector.

In addition to exchanging ideas about the development of the oil sector, they also discussed the “necessary coordination between the producers inside and outside OPEC to take the necessary decisions to stabilize the international oil market.

(Source: Ministry of Oil)

Iraq oil Output Falls on OPEC Cuts

By John Lee.

The Director of the State Oil Marketing Organization (SOMO), Falah al-Amiri, has told reporters that crude oil exports so far in March average 3.756 million bpd, including 515,000 bpd exported by Iraqi Kurdistan.

According to Reuters, Iraq’s oil production is down by more than 300,000 bpd, to 4.464 million (bpd), due to OPEC cuts.

(Source: Reuters)

Iraq, Iran agree to Resolve Dispute on Joint Oil Fields

By Sara al-Qaher for Al Monitor. Any opinions expressed here are those of the author and do not necessarily reflect the views of Iraq Business News. 

On Feb. 20, the Iraqi Oil Ministry signed a memorandum of understanding with the Iranian Oil Ministry to settle disputes over the joint oil fields and examine the possibility of building a pipeline to export crude oil from the Kirkuk fields, in the north of Iraq, through Iran. The ministry also wants to study moving Iraqi crude oil to the Iranian Abadan refinery.

According to an Iraqi Oil Ministry statement, Iraqi Oil Minister Jabbar al-Luaibi agreed with his Iranian counterpart Bijan Zanganeh during the latter’s visit to Iraq on coordinating their stances in the Organization of the Petroleum Exporting Countries (OPEC) to achieve balance in the global oil markets, support oil prices and study the construction of pipelines to export crude oil from Kirkuk fields through Iran.

Five Iraqi oil fields are situated along the border with Iran: Dehloran, Shahr, Paydar Gharb, Aban and Al Noor. Baghdad and Tehran share the fields of Majnoon, Abu Ghraib, Bazerkan, Al-Fakkah and Khana. These fields contain huge reserves of light crude oil close to the earth’s surface and reserves exceeding 95 billion barrels. This is the largest reserve of hydrocarbons in the Middle East.

On Feb. 2, Iranian companies resumed drilling 20 new oil wells in the southern Azadegan field, which is one of the shared oil fields between Iraq and Iran.

Oil and Energy Committee member of parliament Ahmad Madloul told Al-Monitor that most disputed oil wells are Iraqi, according to the maps that were published before the Iran-Iraq war. But Iran believes otherwise. The agreement will be decisive for settling the dispute. He said, “If a joint committee is not formed, the oil wells will bring bigger problems in the future for both countries.”

He asked that the committee identify, when formed, the proprietorship of the lands first to find out who rightfully owns the oil wells on the shared borders.

Oil Export, OPEC Cut Effects and Budget Implications

By Ahmed Mousa Jiyad.

Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.

Oil Export, OPEC Cut Effects and Budget Implications

Monthly data during the first half of this year are important for Iraq for two main reasons: they reveals the test of OPEC-cuts and how Iraq is actually comply with and affected by them; and the second is the budgetary implications as far as its main thresholds: oil exports, oil prices, oil revenues and KRG oil delivery commitments.

While international business, banking and financial entities, energy consulting firms, media sources among other began a wave of reporting, estimating, speculating reports on these issues, nothing of substance on these issue came from the Ministry/Minister of Oil until SOMO released today its January export data.

As it is known, SOMO monthly reports are released, since 2008, and focuses mainly on oil export volume, oil revenues and average oil price. But such monthly report does not cover oil production and does not cover KRG production and exports; and since the Ministry has imposed anti-transparency environment by terminating the publication of data on oil production and its allocation since September 2016, I used reputable international sources to acquire the missing data.

This brief intervention has three parts:

  1. First part provides assessment of oil export performance for 2016 and concluding that due to lower oil prices and oil exports had resulted in more than 26% deficit in the budgeted oil export revenues.
  2. The second focuses on January oil export and its implication for budget 2017; concludes that first month of OPEC accord worked contrary to Iraq’s interest and, thus, warns against any call based on non-consolidated improvement of oil prices while ignoring the whole picture.
  3. The third part assesses Iraq compliance with OPEC cut of November 2016 through different sources of estimation and raises the possibility missing significant volume of oil produced during January.

Finally, the paper concludes by requesting the Ministry/Minister of Oil to clarify any ambiguities by making full, accurate and transparent disclosure of data and give convincing explanation; and stands against unjustified early revision of the state budget.

Please click here to download Ahmed Mousa Jiyad’s full report.

Mr Jiyad is an independent development consultant, scholar and Associate with Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya@online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.

Iran, Iraq Sign MoU to Export Kirkuk Oil

Iraq’s Oil Ministry announced that Tehran and Baghdad have signed a memorandum of understanding (MoU) to carry out studies on the construction of a pipeline to export crude oil from the northern Iraqi fields of Kirkuk via Iran.

In a statement, the Iraqi ministry said the agreement was signed during a recent ceremony in the Iraqi capital between Iranian Oil Minister Bijan Namdar Zanganeh and his counterpart Jabar al-Luaibi, Reuters reported.

The agreement also calls for a commission to resolve disputes about joint oilfields and the possible transportation of Iraqi crude to Iran’s Abadan refinery, it added.

The two sides have also agreed to cooperate on the policies of the Organization of the Petroleum Exporting Countries (OPEC).

Under the scenario, the Iraqi government would be shipping about 150,000 barrels per day of oil through Iran from fields in Kirkuk, the report added.

(Sources: Tasnim, under Creative Commons licence; Iraqi Ministry of Oil)

Iraq the “Biggest Threat to the OPEC Deal”

By John Lee.

According to a report from Markets Insider, the biggest challenge to the recently-announced OPEC oil production cuts is Iraq.

Under the agreement, Iraq has committed to cut production by 210,000 barrels per day. “That sounds simple in theory,” writes Michael McDonald, “just switch off a few pumps. In reality it’s much more difficult than that.”

He continues:

“Iraq … has made with international oil companies which operate its massive southern oil fields. Those companies are not just going to go along with an edict issued by the Iraqi government – they have contracts to fulfill and they are going to try and maximize their own profits according to those contracts. Thus unlike Saudi Arabia, Iraq is not really in control of its own production.”

Click here to read the full article.

(Source: Markets Insider)