(Reuters) Iraq has assured OPEC it will fully comply with an agreement to cut oil supply in order to bolster crude prices, OPEC Secretary General Mohammed Barkindo said on Sunday in Baghdad.
Iraq’s compliance stands now at 98 percent, the nation’s oil minister Jabar al-Luaibi told reporters, after addressing a conference in the Iraqi capital, also attended by Barkindo.
Compliance with the deal agreed by OPEC and non-OPEC producers at the end of last year to cut supply is “encouraging,” Barkindo told the forum.
General compliance with supply cuts by the oil producers was 86 percent in January and 94 percent in February, he added.
The market is already balancing, Barkindo said, adding stocks of crude were coming down.
Luaibi said he was satisfied with the existing deal, but declined to say whether Iraq would support an extension, leaving it to an OPEC ministerial meeting planned in May.
The current deal, he said, “contains many positive elements and achieved a lot of targets; work is ongoing to reach the reduction of 1.8” million barrels per day (bpd) agreed by OPEC and 11 other nations including Russia for their combined production in the first half of 2017.
The accord has lifted crude to about $50 a barrel. But the price gain has also encouraged U.S. shale oil producers, which are not part of the pact, to boost output.
While Iraq is committed to achieving 100 percent of its target reduction, it will proceed with projects to boost oil production capacity to 5 million barrels per day, Luaibi said.
OPEC’s second-largest producer, after Saudi Arabia, Iraq will proceed in parallel with exploration plans to increase its reserves by 15 billion barrels in 2018, to reach 178 billion barrels, he said.
Among the plans to increase output capacity from existing fields is a sea water injection plan which is in process of being tendered, he added.
Iraq’s oil production has averaged 4.464 million barrels per day (bpd) so far in March, a reduction of more than 300,000 bpd on levels before OPEC cuts were implemented from Jan. 1, state-oil marketer SOMO said on Thursday.
Average crude exports were 3.756 million bpd in March, versus a record of more than 4 million bpd in November, according to SOMO.
Barkindo described as “very constructive” meetings he had on Saturday with Prime Minister Haider al-Abadi and other Iraqi leaders in Baghdad.