Iraq has released detailed data about the crude oil output at each of its 26 oilfields as well as equally detailed export figures in an attempt to prove that OPEC’s external-source output estimates do not reflect reality.
This is an unprecedented level of detail for the data – Iraq usually supplies just one figure for output and one for exports. Now, the data also includes a total output figure from fields in Kurdistan.
According to these figures, Iraq pumped 4.7 million bpd in September, a few hundred thousand bpd more than what the external sources that OPEC uses for its calculations reported. However, Bloomberg notes, most of the difference between Iraq-reported and externally sourced production figures comes from Kurdistan output, and Iraq’s State Oil Marketing Company did not supply a breakdown of that.
This transparency drives started last week, when Iraq’s Energy Minister, Jabbar al-Luaibi, invited media to Baghdad to discuss production data. The invitation reflected the minister’s renewed effort to remain exempt from OPEC cuts, after initially lashing out at OPEC’s management for using external source-data as the basis for discussing future production quotas, rather than self-reported figures.
The effectiveness of this transparency move, however, remains doubtful. Iraq is OPEC’s second-biggest producer, and it wants to be exempt from a production freeze. It is unclear
how revealing higher production figures than those reported by external source would help its case, unless OPEC has agreed to agree to a cut on a percentage basis—which may very well be the case.
But the most solid argument that Iraq has in defense of its push for an exemption is its continuing battle with the Islamic State, which necessitates maintaining production at its current levels, regardless of what those production rates really are.
Last week, Al-Luaibi rattled markets by saying that if it weren’t for the war with IS, Iraq would be pumping 9 million bpd, adding that Iraq had lost market share to other producers as a result of the conflict, implying that a production cut in Iraq would mean losing even more market share.
This Friday, yet another meeting between OPEC members and some non-OPEC producers ended with not even a whiff of an agreement. Iraq and Iran both insist on an exemption from a freeze or cut, and the chances of the organization breaking the deadlock are getting slimmer.
What Iraq’s data release does do for the markets, is confirm the notion that production figures for OPEC members lack some transparency or accuracy, which may bring even more volatility to the already volatile markets.
By Irina Slav for Oilprice.com
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