IRAQ OIL PRODUCTION 4.2 MBD

PLATTS - 07 Jun 2020 - Iraq on June 7 reported its May crude oil production was 4.213 million b/d, well above its OPEC+ quota, one day after it agreed to improve its compliance with historic output cuts.

Exports were 3.633 million b/d, Iraq's state-owned marketing company SOMO said in a statement. The output and export figures include federal Iraq and the semi-autonomous northern Kurdistan Regional Government.

Output was well above its quota of 3.592 million b/d for May and June. as agreed under the historic production cuts of OPEC and its allies, led by Russia. Ministers on June 6 approved a one-month rollover of their now 9.6 million b/d production cut accord through July after receiving pledges of improved compliance from Iraq, Nigeria, Angola and Kazakhstan.

Under the deal, those countries will compensate by implementing deeper cuts in the amount of their overproduction for July, August and September. The hard bargain, which Iraq had resisted, according to delegates involved in the talks, came at the insistence of Saudi energy minister Prince Abdulaziz bin Salman and his Russian counterpart Alexander Novak.

Iraq's lackluster compliance has long been a sore spot for OPEC+ members. Analysts say Iraq's fractured politics and potential financial hit if it forces international oil company partners to shut in production make the country unlikely to fulfill its commitment, let alone come through with deeper cuts.

In a statement June 5, Iraqi oil ministry spokesman Assem Jihad said Iraq was committed to the OPEC+ deal and attributed its overproduction to its need for oil revenues to rebuild after years of war, as well as a recent transition to a new government under Prime Minister Mistafa al-Kadhimi, who took office in May.

Parliament on June 6 approved Kadhimi's nomination of Basra Oil Company Director General Ihsan Ismaael to serve as Iraq's oil minister.

Postponed negotiations with the semi-autonomous Kurdistan Regional Government over sharing oil revenues also prompted the KRG to delay the implementation of its agreed 23% crude production cut, Jihad added.

"Despite the economic and financial conditions facing Iraq, it is sticking to adherence to the agreement, because it believes in the necessity of solidarity of all producers ... to save the oil market," he said.

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