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Lukoil: No directive to cut oil production in Iraq

20 December 2016 , 14:15Daniel J. GraeberNeftegaz.RU814

There's been no directive from the government in Baghdad to curb oil production for next year, the head of a Russian oil company said.

 

Russian oil company Lukoil started production from the West Qurna-2 oil field, located in southern Iraq, in early 2015.

The Iraqi government said full field production could eventually reach 400,000 barrels of oil per day.

 

Iraq is a member of the OPEC and agreed to cut oil production to 4.35 million bpd starting Jan. 1. An OPEC deal reached late November to curb output is aimed at restoring balance to a market favoring the supply side and Iraq's commitment was hard to come by as the government said it needs revenue from oil to finance the fight against the Islamic State terror group.

 

Vagit Alekperov, the head of the Russian oil company, said there are no plans to cut production from Iraqi operations.

«So far, we have not received such recommendations from the Government of Iraq,» he was quoted by Tass as saying.

 

Iraq reported to OPEC its total crude oil production in November was 4.8 million bpd. The OPEC agreement uses 4.56 million bpd as a reference for Iraq.

British energy company Petrofac last week secured a $75 million contract to help with the expansion of a crude oil export facility at a southern Iraqi port.

The Iraqi government is developing the southern export expansion project with the goal of expanding exports capacity from offshore facilities by 150%.

 

The OPEC agreement depends on non-member states like Russia to do their part to trim production.

The Lukoil director said recently that «only recommendations» have been made on domestic production.

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