Iraqi Prime Minister Mohammed Shia Al Sudani on Saturday voiced concerns about his country's Opec-approved export quota, saying it did not align with the country's vast oil reserves, production capacity, population or financial needs.
“We hope that our brothers and friends will understand the developmental and economic necessities of Iraq and reconsider our quota based on indicators of our real oil capabilities,” Mr Al Sudani said at the opening of the Baghdad International Energy Forum.
He emphasised the need for increased revenue to support “reconstruction and services in a country ravaged by wars and conflicts”.
Oil revenue makes up more than 90 per cent of Iraq's budget. The country produces more than four million barrels per day from Baghdad-controlled oilfields, up from nearly 2.4 million bpd in 2009, according to Oil Ministry data.
Its daily exports averaged 3.38 million bpd in August, with between 3.4 and 3.45 million bpd expected in September, the chief of Iraq's State Oil Marketing Organisation (Somo), Ali Nizar Al Shatri, said on Saturday.
With ambitions to expand its production capacity and contribute more significantly to global energy markets, the two-day forum provides a platform for Iraq to showcase its potential and attract investment in the sector.
“We affirm our openness to receiving oil companies eager to invest in oil and gas,” Mr Al Sudani said in his opening remarks.
“There will be preferential procedures for major companies according to the country's supreme interests.”
He hailed the political and security stability in the country that allowed the government to launch infrastructure projects and introduce economic reforms. That environment has also allowed the government to sign several agreements for mega projects, mainly in the energy sector.
“Iraq has transformed into a thriving industrial and developmental field, with new areas emerging for energy production and rapid development,” he said.
Mr Al Sudani pitched the country as a “land of security, a field of promising opportunities and a hub for innovation”.
He said the country's proven reserves “would sustain global markets for at least 120 years at current rates”.
Iraq's energy sector has faced challenges due to decades of conflict, sanctions and infrastructure damage, but recent efforts have focused on rebuilding and expanding its oil production capacity.
Record oil production
Encouraged by an improved security situation, the country began to open its oilfields to international companies for development in 2009. Top among major oil companies were the US‘s Exxon Mobil, Royal Dutch Shell, the UK’s BP, China’s CNPC and Russia’s Lukoil.
Since then, Iraq has awarded dozens of contracts to develop major fields, including ones that hold more than half of its 145 billion barrels of proven reserves. Contracts to tap natural gas resources have also been awarded.
As a result, Iraq’s daily production and exports have risen to an all-time high.
Iraq has already set out an ambitious plan for expansion.
During the Prime Minister's visit to Oman last week, Iraq signed several memorandums of understanding, including two between Somo and Oman's OQ Group. One of them are to develop an integrated crude oil storage project at Ras Markaz with an initial capacity of 10 million barrels, it said in a statement on Saturday. The second would allow OQ Trading to market Iraqi crude globally, leveraging the commercial and administrative expertise of both sides, it added.
Somo is also in advanced talks with ExxonMobil over a possible agreement to secure storage capacity in Singapore using tanks owned by the US oil major, it added. Negotiations also include possible refining capacity deals and profit-sharing arrangements in Asia, where demand for crude and products continues to grow, according to the statement.
Opec+ meeting
Mr Al Sudani’s comments about expanded quotas came a day before the monthly gathering of the Opec+ alliance, which is jointly led by the Saudi Arabia and Russia, to review the oil market and adherence to existing supply restrictions.
Concern about a supply glut stemming from higher US inventories and another possible increase from Opec+ have hit oil prices in the international market.
Brent, the benchmark for two-thirds of the world's oil, was down 0.27 per cent to $66.81 a barrel on Friday. West Texas Intermediate, the gauge that tracks US crude, declined 0.36 per cent to $63.25 per barrel.
Opec+ is expected to consider raising oil production at its meeting on Sunday, sources familiar with the discussions told Reuters.
Responding to a question about Sunday's meeting, Somo Chief and Iraq's Opec representative Mr Al Shatri said attention was focused on balancing the market, whether through increases, maintaining current production, or cuts.
The group agreed to increase oil production by 547,000 barrels per day in September, following a 548,000 bpd rise in August and 411,000 bpd in May, June and July. Last week, US government data showed America's crude inventories grew by 2.4 million barrels.
The International Energy Agency has raised its forecast for oil supply growth this year after the decision by Opec+ to increase production, and lowered its demand forecast due to lacklustre demand across the major economies.
