Iraq closes in on 5 million barrels per day crude output capacity
But oil minister Jabar Al Luaibi says compliance with Opec pact target will remain in place
The Iraqi oil minister Jabar Al Luaibi said on Saturday that the Opec member's oil output capacity is nearing 5 million barrels per day (bpd), but the country will remain in full compliance with its output target under a global pact to cut supplies.
Mr Al Luaibi said the supply cut agreement between Opec and non-Opec producers should continue despite a rise in oil prices.
"The market now is not 100 per cent stable," he said at an industry conference in Abu Dhabi, adding that current oil prices could be sustained, but there might be some fluctuations.
For the week, Brent crude rose 3.3 per cent, while U.S. West Texas Intermediate (WTI) crude jumped 4.7 per cent, having hit its hit its strongest since late 2014 at US$64.77 on Thursday.
The deal between Opec and Russia to cut 1.8 million bpd of crude, which started in January 2017, is due to last until the end of 2018.
Luaibi said current Iraq's oil production is about 4.3 million bpd.
Despite the increase in oil production from the United States, "so far there is a balance" in the oil market, Mr Al Luaibi said.
"We are watching the market and the market is okay in terms of supply and demand balance. There’s still a gap, inventories are still high. The inventory level will decrease gradually and we will see how things will go," he said.
Mr Al Luaibi also said that his ministry plans to conclude three contracts with international gas companies by mid-2018 to utilise gas from Basra, Maysan and Nassiriyah southern provinces.
He said that by 2021, the country plans to "reach zero gas flaring".
Iraq is forced to flare some of the gas produced alongside crude oil as it lacks the facilities needed to capture and process it into usable fuel.
The country has just one gas processing company, the Basrah Gas Company, a joint venture between Iraq's state-run South Gas, Shell and Mitsubishi.
Opec’s second-largest crude producer after Saudi Arabia, Iraq is seeking to increase its oil and gas income, which account for nearly all its public budget.
Updated: January 13, 2018 04:52 PM