IRAQ OIL PRODUCTION DOWN
PLATTS - 10 Sep 2020 - Iraq lowered its crude oil output in August to 3.578 million b/d, official figures showed Sept. 10, but remained above the 3.404 million b/d it had pledged to hold production to under the OPEC+ supply accord.
The production figure, provided by state oil marketer SOMO to S&P Global Platts, includes 3.122 million b/d of federally controlled output and 456,000 b/d from the semi-autonomous Kurdistan region.
The breakdown shows that Iraq's quota breach stems largely from the Kurdistan Regional Government's unwillingness to bring its production down in line with the deal.
Baghdad and Erbil had agreed to share the OPEC+ production cuts proportionally, but the SOMO figures show the KRG achieved just 79% compliance with its quota, while the federal government hit 102%.
Khalid Shwani, the KRG's minister of state, said Sept. 9 that the region could only partially comply with the deal due to its financing needs. The KRG has delayed salaries to its employees due to the financial crisis gripping the country because of low oil prices, he added.
Budget talks between the KRG and the federal government have been ongoing for weeks about revenue sharing.
Iraq's habitual non-compliance with its production quota has been a sore point within the OPEC+ alliance, with Saudi Arabia, Russia and others pressuring Iraq to improve its performance.
Iraq's quota under the OPEC+ pact from August through the end of the year is 3.804 million b/d, but to make up for its excess production in previous months, Iraq had pledged to implement an additional "compensation" cut that would put its effective quota at 3.404 million b/d for August and September.
Oil minister Ihsan Ismaael has said he plans to ask a key OPEC+ monitoring committee co-chaired by Saudi Arabia and Russia for an extension on its compensation cuts when it meets online Sept. 17.
The August production figure was a 119,000 b/d fall from July's 3.697 million b/d.
SOMO said total August crude exports were 3.023 million b/d, of which 2.597 million b/d were from the federal government and 426,000 b/d were from the KRG.
Domestic consumption totaled 555,000 b/d, comprising 525,000 b/d of federally controlled crude and 30,000 b/d of KRG crude.
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