The semi-autonomous region of Iraqi Kurdistan will be required to cut oil output as part of an agreement made on 12 April, according to Iraq’s oil minister Thamer al-Ghadhban.
A delegation from the Kurdistan region is due to arrive at Iraq’s oil ministry to discuss the proposed cuts mechanism on 16 April, according to comments made by Al Ghadhban on 14 April.
Opec and allies led by Russia (Opec+), agreed on 12 April to a record cut in output to prop up oil prices amid the coronavirus pandemic in an unprecedented deal.
The agreement could curb global oil supply by up to 20%.
Iraq, Opec’s second-largest producer after Saudi Arabia, agreed to cut more than a million barrels a day as part of the Opec+ deal.
Currently, Iraq’s Kurdistan region is exporting about 500,000 barrels a day (b/d).
Impact of coronavirus on Iraqi oil industry
Iraq has been hit hard by the Covid-19 pandemic and the related decline in global crude oil prices.
Basra Gas Company (BGC) has put several project contracts temporarily on hold, including engineering, procurement and construction contracts with Italy’s SICIM and China Petroleum Engineering and Construction Corporation, as well as at least one project management consultancy contract with the UK’s Wood Group.
Contractors are also expecting work on phase two of the Majnoon oil field development project to be suspended in the coming weeks.
The client on the $4.7bn project is state-owned Basra Oil Company.
Production has been reduced at Iraq’s Halfaya field and it has been stopped at the Gharraf oil field.
This article is published by MEED, the world’s leading source of business intelligence about the Middle East. MEED provides exclusive news, data and analysis on the Middle East every day. For access to MEED’s Middle East business intelligence, subscribe here.