 | ||
As price collapse deepens, Iraq may review its oil production plans | ||
| 21/12/2014 | ||
At a conference in London, Iraq’s Deputy Prime Minister Rowsch Shaways said, “It may be necessary to revisit our ambitious plans for the next five years.” The country’s semi-autonomous Kurdish area will drive up output and exports in the next several months, an official from the region said. Iraq is supposed to add more barrels by the end of this decade than any other member of the Organization of Petroleum Exporting Countries. The 12-nation group decided on Nov. 27 to maintain output amid a global surplus, prompting speculation that it’s willing to let crude slide to a level that would slow U.S. production, which is at a three-decade high. Axel Herlinghaus, senior commodities strategist at DZ Bank AG in Frankfurt, said, “The low oil price will cut some greenfield oil projects, which the oil market will badly miss in the not so distant future.” He added, “That there might be a substantial number of ‘lost barrels’ stemming from Iraq doesn’t make things easier.” Brent, the global benchmark, slumped 24 percent since the OPEC meeting and is down by almost half since the end of 2013. It fell as much as 2.2 percent today, and was trading down $1.04 at $58.97 a barrel at 1:42 p.m. in London. Supply from Kurdistan Iraq’s oil production will rise to 8.4 million barrels a day by 2018, the nation’s former oil minister said in June, the government’s most recent projection. It pumped 3 million barrels a day last month, the state Oil Marketing Co., or SOMO, said Dec. 11. “We are committed to progress in this vital economic field with regard to production and export capacities,” Shaways, the Iraqi minister, said. The Kurdistan Regional Government will increase pipeline exports to 500,000 barrels a day by the end of March from 400,000 now, Ashti Hawrami, the KRG’s minister of natural resources, said at the London event. Total shipments, including supplies under a deal with the central government, could reach 800,000 barrels a day by then, he said. The region’s oil output will expand to 1 million barrels a day by the end of next year, he said. The International Energy Agency, IEA, said that the country would contribute about 60 percent of new OPEC supply this decade, while warning that fighting with Islamic State could jeopardize that growth. OPEC’s November decision to maintain its production quota of 30 million barrels a day pushed crude deeper into a bear market. The group, led by Saudi Arabia, pumped 30.56 million a day in November, exceeding its target for a sixth straight month, Bloomberg surveys of companies, producers and analysts show. The U.S. pumped 9.12 million barrels a day in the period ended Dec. 5, the most in weekly Energy Information Administration data that started in 1983. The gain came as horizontal drilling and hydraulic fracturing unlocked supplies from shale formations including the Eagle Ford in Texas and the Bakken in North Dakota. Ole Hansen, head of commodity strategy at Saxo Bank A/S, said, “They have a very aggressive output plan for how much they want to increase production over the coming years.” He added, “They may try to support prices by saying that they just might scale back those plans.” | ||
Last Update:: 21/12/2014 | ||
Iraq Directory |