Jabar al-Luaibi, Iraq’s Oil Minister, has announced that the country’s production capacity is nearing five million bpd (barrels per day), but he also stated that Iraq would stand by its commitments as an OPEC member to the global production cuts. Iraq’s current output is 4.3 million bpd.
Speaking during an industry conference in Abu Dhabi, al-Luaibi expressed his belief that the OPEC-led production cuts should continue despite the recent rises in oil prices, describing the market as “not 100% stable.” He did, however, add that he believed that current oil prices were sustainable, although there may be some fluctuations.
Al-Luaibi indicated that inventory levels remain high, but there appears to be balance in the market despite rising US production. He said:
“The inventory level will decrease gradually and we will see how things will go.”
Should the OPEC deal be relaxed earlier, Iraq looks set to benefit from its spare capacity, which could be significant given that the Middle Eastern country’s public budget is highly dependent on oil and gas income.
Al-Luaibi also indicated the country was moving away from flaring gas produced alongside crude, and looking to eliminate the practice by 2021.
While Iraq’s oil industry was a state-run concern under the Saddam Hussein regime, later governments have engaged with international oil companies to develop oil fields. For example, ExxonMobil, the oil giant behind Mobil distributors, won a $50bn contract in 2009 to develop the West Qurna I field, with the aim of raising production from 0.27 to 2.25 million bpd.