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Iraq says it's close to fully implementing Opec output cut

Thursday, January 26, 2017 - 22:47

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Iraq is close to fully implementing its share of the crude-production cuts agreed with the Organization of Petroleum Exporting Countries (Opec), said Oil Minister Jabbar Al-Luaibi.

[LONDON] Iraq is close to fully implementing its share of the crude-production cuts agreed with the Organization of Petroleum Exporting Countries (Opec), said Oil Minister Jabbar Al-Luaibi.

The Middle Eastern producer, the second-largest in Opec, has already reduced output by 180,000 barrels a day and will cut another 30,000 by the end of the month, fully complying with the accord, ,Mr Al-Luaibi said in a Bloomberg television interview on Monday.

"This whole sacrifice is for Opec unity," Mr Al-Luaibi said.

"At the same time we are after the balance of the oil market."

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While 90 per cent of the output cuts have come from fields operated by companies run by Iraq's federal government, Baghdad is also coordinating reductions with the semi-autonomous region of Kurdistan and international oil companies, he said at Chatham House in London.

Most international companies have said they're willing to participate in supply reductions, Mr Al-Luaibi said. The government wouldn't have to compensate them if their cuts are the result of scheduled maintenance work, he said.

Opec and other oil producers have already cut oil supply by 1.5 million barrels a day, more than 80 per cent of their collective target, since the deal took effect on Jan 1, Saudi Arabia's Minister of Energy and Industry Khalid Al-Falih told reporters in Vienna on Sunday. The group agreed over the weekend on a way to monitor their compliance, putting global markets on track to re-balance after more than two years of oversupply.

It's too early to say if the cuts could be extended beyond the initially agreed six month term, Mr Al-Luaibi said.

Mr Al-Falih and his Algerian counterpart Noureddine Boutarfa said over the weekend that the agreement probably won't need to continue after June because early compliance with cuts was so high.

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