Iraq had assured Opec it would fully comply with an agreement to cut oil supply in order to bolster crude prices, Opec secretary general Mohammed Barkindo said in Baghdad.
Iraq’s compliance stands now at 98 per cent, the nation’s oil minister Jabar al-Luaibi told reporters, after addressing a conference in the Iraqi capital on Sunday, also attended by Barkindo.
Compliance with the deal agreed by Opec and non-Opec producers at the end of last year to cut supply was “encouraging”, Barkindo told the forum.
General compliance with supply cuts by the oil producers was 86 per cent in January and 94 per cent in February, he added.
The market was already balancing, Barkindo said, adding stocks of crude were coming down.
Luaibi said he was satisfied with the existing deal but declined to say whether Iraq would support an extension, leaving it to an Opec ministerial meeting planned in May.
The current deal, he said, “contains many positive elements and achieved a lot of targets; work is ongoing to reach the reduction of 1.8 million barrels per day (bpd)” agreed by Opec and 11 other nations including Russia for their combined production in the first half of 2017.
The accord has lifted crude to about $50 a barrel. But the price gain has also encouraged US shale oil producers, which are not part of the pact, to boost output.
While Iraq is committed to achieving 100 per cent of its target reduction, it will proceed with projects to boost oil production capacity to five million barrels per day before the end of the year, Luaibi said.
Opec’s second-largest producer, after Saudi Arabia, Iraq will proceed in parallel with exploration plans to increase its reserves by 15 billion barrels in 2018, to reach 178 billion barrels, he said.
Among the plans to increase output capacity from existing fields is a sea water injection plan which is in process of being tendered, he added.
Iraq’s oil production has averaged 4.464 million barrels per day (bpd) so far in March, a reduction of more than 300,000 bpd on levels before Opec cuts were implemented from January 1, state-oil marketer SOMO said.
Average crude exports were 3.756 million bpd in March, versus a record of more than four million bpd in November, according to SOMO.
Most of Iraq’s crude is exported from southern ports, the region where it is produced. Exports from the south averaged 3.2 million bpd in March, Luaibi said.
Barkindo described as “very constructive” meetings he had on Saturday with Prime Minister Haider al-Abadi and other Iraqi leaders in Baghdad.
Iraq’s natural gas output will triple to 1,700 million cubic feet per day (cfd) by 2018, as it implements projects to reduce flaring, Luaibi told the conference.