Register with us today

and in less than 60 seconds continue your access to:Latest news headlinesAnalytical topics and featuresCommodities videos, podcast & blogsSample market prices & dataSpecial reportsSubscriber notes & daily commodity email alerts

Already have an account?

Log in to register

Forgot Password

Please Note: Platts Market Center subscribers can only reset passwords via the Platts Market Center

Enter your Email ID below and we will send you an email with your password.


  • Email Address* Please enter email address.

If you are a premium subscriber, we are unable to send you your password for security reasons. Please contact the Client Services team.

If you are a Platts Market Center subscriber, to reset your password go to the Platts Market Center to reset your password.

In this list
Oil

Interview -- OPEC cut deal based on crude oil exports, not output: Iraq's Luaibi

Bunker Fuel | Oil | Crude Oil | Fuel Oil | Shipping | Marine Fuels | Storage | Tankers

Sweet opportunities remain for sour crude and heavy products

Oil

Platts Rigs and Drilling Analytical Report (RADAR)

Commodities | Oil | Crude Oil | Marine Fuels

Marine Fuel Strategy Seminar (at MEEPEC)

Commodities | Agriculture | LNG | Oil | Crude Oil | Petrochemicals | Shipping

US to raise tariffs on $550 billion of Chinese imports by 5 percentage points: Trump

Interview -- OPEC cut deal based on crude oil exports, not output: Iraq's Luaibi

Highlights

Industry players, upstream and downstream markets, refineries, midstream transportation and financial reports

Supply and demand trends, government actions, exploration and technology

Daily futures summary

Weekly API statistics, and much more

* Minister says exports form baseline of OPEC cut deal
* Iraq increasing domestic consumption as production rises
* Exports averaged 3.8 million b/d in Jan-Feb: Platts data

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

Over the first two months of OPEC's crude output cut agreement, Iraq has been the member furthest from compliance with production some 91,000 b/d above its allocation, according to the latest S&P Global Platts OPEC survey.

But Iraq's oil minister, Jabbar al-Luaibi, in a wide-ranging interview with Platts in Washington over the weekend, said the OPEC deal was based on exports and not production totals.

"This time, for the first time, OPEC implied that production should be separate from export and their baseline is exports not production," Luaibi said.



Using this as his basis, the minister said Iraq was in almost total compliance with the OPEC deal, and would remain as such.

"Iraq is definitely resolved and Iraq is committed to be in line with OPEC," he said.

Luaibi's comments will be news to the other 12 members of OPEC.

The organization's press release announcing the agreement on November 30 said the bloc "has decided to reduce its production by around 1.2 million b/d to bring its ceiling to 32.5 million b/d" and included a table of each country's "agreed crude oil production adjustments and levels."

The deal is to be based on secondary source estimates of OPEC production, the press release said, including the Platts survey.

Iraq is required to cut 210,000 b/d from its October output levels, according to the table, for a quota of 4.351 million b/d.

Iraq's February output was 4.40 million b/d, according to the Platts survey, down from 4.48 million b/d in January, for a two-month average of 4.442 million b/d.

The country self-reported to OPEC a February output level of 4.57 million b/d, according to OPEC's monthly oil market report released Tuesday.

OPEC Secretary General Mohammed Barkindo in a text message suggested that there were "probably language problems" in the interview.

But Luaibi, who speaks to the media often in English, clarified several times during the interview that the deal was based on exports, not production.

"All countries -- export," Luaibi said when asked whether only Iraq was required to reduce exports, not production, under the deal. "It's export."

Barkindo did not immediately respond to a follow-up query on Luaibi's comments.

Luaibi spent last week at the CERAWeek conference in Houston, where he met Barkindo and Saudi energy minister Khalid al-Falih.

Barkindo, in February, said in an interview with Bloomberg Television he was in discussions with Iraqi officials on their compliance with the deal.

"I have got commitment from the highest level of government in Baghdad that they will implement their obligations fully," he said.

"What we are seeing is the efforts they are making in achieving their targets. Each member country has their own peculiar logistical challenges, and Iraq is not an exception."

Luaibi, immediately after OPEC's meeting last September in Algiers where the preliminary framework of the agreement was announced, criticized the use of secondary sources to monitor production, saying Iraq's output was being chronically underestimated.

In his interview with Platts, Luaibi pegged current Iraqi output at 4.63 million b/d.

Iraqi exports were in the range of 4.3 million-4.4 million b/d, of which 3.23 million-3.24 million b/d were from Iraq's southern ports, Luaibi said. A lack of transparency on exports from the north of Iraq through pipelines controlled by the semi-autonomous Kurdistan Regional Government made it difficult to get a more exact overall Iraq export figure, he said.

"If you take the export [figures], that should be in line with the OPEC declaration," Luaibi said.

A five-country monitoring committee is scheduled to hold a ministerial meeting March 25-26 in Kuwait City to discuss compliance with the agreement and discuss next steps.

The committee is chaired by Kuwaiti oil minister Essam al-Marzouq, along with ministers from OPEC members Algeria and Venezuela, and also Oman and Russia, who are representing the 11 non-OPEC countries that have committed to a combined cut of 558,000 b/d in concert.


CRUDE OIL EXPORTS DOWN


Iraq's southern exports fell to 3.321 million b/d in January, down nearly 6% from the record rate of over 3.5 million b/d set in December, according to Platts data.

Platts estimates the Kurdistan region exported an additional 530,000 b/d, bringing the country total to 3.850 million b/d, roughly 200,000 b/d lower than the 4.050 million b/d rate estimated for December.

February crude oil exports averaged 3.270 million b/d, down a further 51,000 b/d from January, while Kurdish exports were stable at around 530,000 b/d. Total February exports were estimated at 3.800 million b/d, down 50,000 b/d from January.

Iraq's nominations for March loadings totaled 93.43 million barrels of crude, or around 3.01 million b/d. The April loading program, seen Tuesday, is slightly higher at an average 3.171 million b/d.

Iraq is diverting more crude to local consumption, both in power plants and in refineries, Luaibi said, in an effort to meet its OPEC obligations by lowering exports.

Platts estimates Iraqi refineries consumed around 500,000 b/d of crude in February, while the power plants took in 200,000 b/d.

Most of Iraq's refineries are underserved, so there is scope for some increased consumption. The oil ministry could also choose to burn more crude oil for power generation rather than using gas, to lower exports.

At the same time, however, production was on an upward trajectory, Luaibi said, and by the end of this year "definitely we are going to reach the level of 5 million b/d."

The latest addition to Iraq's production came from the Badra oil field, which is operated by Russia's Gazprom Neft. The company commissioned three new production wells earlier this month.

Production across all three wells was running at 23,000 b/d, Gazprom Neft said last Thursday, with total output at the field now at 77,000 b/d.

Gazprom Neft is continuing with its infrastructure work at the field and is carrying out pre-commissioning work at its gas treatment plant.

--Ben Lando, newsdesk@spglobal.com
--Adal Mirza, adal.mirza@spglobal.com
--Herman Wang, herman.wang@spglobal.com
--Edited by Jonathan Dart, jonathan.dart@spglobal.com