Iraq's new Oil Minister Jabbar Al-Luaibi has asked the multinational corporations extracting oil on Iraqi lands to increase output, following a strong push by several other members of the Organization of Petroleum Exporting Countries to reach an agreement to freeze production next month.
Al-Luaibi called on firms to ramp up production in order to "boost national revenue", according to an email obtained by Bloomberg. Although any ramp-up in production now would give it ammunition to freeze at this higher production level next month when OPEC members are scheduled to meet in Algeria during the International Energy Forum to discuss measures to reverse the ongoing oil glut.
The OPEC member's production rate peaked at 4.51 million barrels per day in January 2016 - a month before barrel prices crashed to $26.21. Last month, Iraqi fields generated 4.36 million barrels a day.
Iraq has yet to confirm whether or not al-Luaibi will even attend the Algiers meeting, but his latest statement suggests that if he did attend, he would oppose efforts by Algeria, Venezuela and other suffering economies to freeze oil production.
"We, all, should keep in mind that increasing the oil production and associated gas utilization will not be compromised," al-Luaibi said in an August 21 letter to contractors, according to a local news report cited by Bloomberg. "The full field development plans should contain specific and obvious commitments in respect of these two vital issues." Related: China Plans To Slash Crude Demand By 250,000 Bpd
Most of Iraq's crude oil extraction occurs in the southern portion of the country, under the purview of the South Oil Company - of which al-Luaibi was a longtime executive.
The freshman oil minister has also recently said that the oil export problem between the Iraqi government and the Kurdistan Regional Government are fundamentally resolvable.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on… More