Iraq, OPEC’s second-largest producer and the biggest cheater in previous production cut deals, is facing problems under the new OPEC+ deal.
Iraq’s compliance with the deal is yet again in question, as negotiations with oil majors about which oilfields should cut production would continue, even as the historic agreement entered into force almost a week ago.
Iraq hasn’t informed yet its key oil customers about how much the country’s crude exports will be because of protracted talks with international oil companies, which have been further complicated by Iraq’s inability to form a new government, industry and trade sources told Reuters on Wednesday. As part of the OPEC+ deal, Iraq needs to cut around 1 million barrels per day (bpd) of its production, which stood at 4.585 million bpd in March 2020, as per OPEC’s secondary sources in its latest Monthly Oil Market Report (MOMR).
But Iraq has yet to agree how the cuts should be divided among the many major Iraqi oilfields, most of which are operated by international majors, including ExxonMobil, BP, Eni, and Lukoil, a spokesman for the Iraqi state-owned Basra Oil Company (BOC) told Reuters. “Talks with international oil companies are still continuing to discuss ways of curtailing production that serve all parties and ensure mutual interests are observed,” the spokesman told Reuters, adding that he hopes a breakthrough could be reached soon.