Daily Management Review

Iraq agrees with foreign companies to reduce oil production in June


Iraq has agreed with foreign companies to further reduce oil production in June, as the country is trying to improve its execution of the OPEC + deal, Reuters reported citing several unnamed sources working at the affected oil projects.

According to the agency’s interlocutors, Russian Lukoil will further reduce oil production at the West Qurna-2 project by 50 thousand barrels per day, starting from June 13, to 275 thousand barrels per day. In addition, the Iraqi Basra Oil Company asked British BP to reduce oil production at the Rumaila project by 140 thousand barrels per day from about 1.4-1.45 million barrels per day.

The American ExxonMobil agreed to reduce production on the West Qurna-1 project by an additional 70 thousand barrels per day, to about 350 thousand barrels per day in June. In May, the company has already reduced oil production on the project by 50 thousand barrels per day, to 420 thousand.

New OPEC+ agreements started in May with a reduction in oil production of 9.7 million barrels per day for two months. On June 6, the agreement was extended to July. Further, the volume of reductions will decrease to 7.7 million barrels per day for the period until the end of the year and 5.8 million to the end of April 2022. The base of reference was taken in October 2018. For the Russian Federation and Saudi Arabia, an indicator of 11 million barrels per day was set, of which, by analogy, there is a decrease of 23%, 18% and 14%, respectively. At the same time, countries that failed to fulfill their obligations in May-June committed to compensate for this in July-September.

As Saudi Arabian Energy Minister Prince Abdel Aziz bin Salman said earlier in June, Iraq told the alliance that it completed the OPEC + deal by only 70% in May.

source: reuters.com