Opec quota talks at least 2 years away: Iraq
London, June 18, 2012
Iraq, gaining on Iran as Opec's second-largest oil producer, is at least two years away from reaching an output level that will prompt a debate within the producer group on setting Baghdad's individual output quota, a senior Iraqi official said on Monday.
Thamir Ghadhban, energy adviser to Iraq's prime minister, said analysts had spoken of the possibility of conflict within the Organization of the Petroleum Exporting Countries after Iraq regains a leading role.
Iraq was outside Opec's agreements to set oil output levels for years until December, when it became included in an overall Opec target to pump 30 million barrels per day (bpd). But Opec has not divided up that into individual output quotas for its 12 members, baulking at the delicate topic.
'This issue is not of immediate concern within Opec as we are still two years away from reaching production capacity exceeding 4 million barrels per day,' Ghadhban said at a London energy conference.
Opec's quota debate will draw in Iran, which before the 1990-1991 Gulf War had parity with Iraq. The stated output capacity of Iran is about 4 million barrels per day.
At its meeting in Vienna last week, Opec said it would trim output that members were pumping above the 30 million bpd target to bolster the price of oil, which has slid by $30 a barrel since March to below $98 a barrel on Monday.
But the lack of individual quotas could make it harder for Opec to convince the market it is serious about curbing output.
Eyeing second place
Iraq was exempt from Opec's output quotas for years because of war and sanctions. The last time Iraq had a quota was in June 1990, when both Iran and Iraq had targets of 3.14 million bpd, Ghadhban said.
Baghdad's oil expansion programme has already pushed its oil supplies to 3 million bpd - a level last pumped before Iraq invaded Kuwait in 1990 - and just a touch below Iran, where output has sunk to a 20-year low because of Western sanctions.
Ghadhban said Iraq's production capacity will reach 3.4 million bpd by the end of the year. By 2014, it is expected to hit 4.5 million bpd.
'It won't be long before Iraq takes second place in Opec,' he said. 'The expansion of Iraq's production and export capacity is now a reality.'
Ghadhban told the conference that Baghdad's lost capacity over the past three decades had benefited other producer countries and that some producers could not meet earlier output quotas. Iraq needed to ensure it gets an 'adequate' Opec quota when the time comes, he said.
'We are not facing an imminent problem with regard to Iraq's effort to regain its rightful place in Opec,' he said. 'It is more constructive to look at the bright side of Iraq again becoming a main contributor of oil supplies.'
Ghadhban also said Iraq was considering lowering its target to expand its output capacity to about 9.3 million bpd from the existing 12 million bpd, seen by some in the industry as too ambitious.
Even then, Iraq would still rank second in Opec to Saudi Arabia, whose production capacity is 12.5 million bpd. – Reuters