In order to ensure that oil reserves last longer, Baghdad has reduced its peak production targets, and has asked major oil producers in the country to help make these cuts. As a result BP is considering cutting its output target for the giant Rumaila oilfield by more than one million barrels a day.
"It is something the government has asked us to do," said Bob Dudley, the Chief Executive of BP.
Iraq's original production target of 12 million barrels a day by 2017 has been cut to a more realistic target of nine million barrels a day, and operators at southern oil fields such as the Rumaila are working to lower their production rates to comply. Even then many experts believe that nine million will be a difficult target to achieve due to the lack of infrastructure.
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According to Reuters, BP began discussing the possibility of reducing targets last year and in December sources said that BP was close to agreeing a deal to cut output at Rumaila to between 1.8 million and 2.2 million barrels a day.
The Iraqi oil ministry has already made agreements to lower production targets with Lukoil at West Qurna-2 and Eni at Zubair, and continues to negotiate with Royal Dutch Shell at Majnoon and Exxon at West Qurna-1.
By. Charles Kennedy of Oilprice.com
Charles is a writer for Oilprice.com More