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Iraq says exemption push doesn't mean deal is dead

21 Nov 2016 12:13 GMT
Iraq says exemption push doesn't mean deal is dead

Vienna, 21 November (Argus) — Iraq's push for an exemption from a proposed agreement to curb Opec crude output doesn't mean the deal cannot be finalised, oil minister Jabbar al-Luaibi said today.

"Legitimate demands should not be taken as constituting an obstacle to arriving at a new agreement to freeze output", he said.

Al-Luaibi said Iraq "reconfirms its commitment to the unity and cohesion of the organisation" and will make suggestions at this week's series of Opec meetings in Vienna on how to implement an agreement. The minister did not specify what the suggestions would be, and there was no suggestion that Iraq would be willing to cut its crude production.

Iraq argued at the Opec meeting in Algiers in September it should join Iran, Nigeria and Libya in receiving an exemption from a proposed production restraint deal, because more than a decade of war has drained the country's revenues. Failing this, its delegation argued against having its output — and hence the level from which it might have to freeze or reduce production — based on secondary source numbers. Al-Luaibi argued Iraq's oil output was seriously underestimated by Opec's secondary sources, which include Argus.

Iraq's ministry said it produced 4.776mn b/d in October. Secondary sources estimated the country's October figure at 4.561mn b/d.

Opec began its second high-level technical meeting in Vienna today, seeking to finalise the details of a framework agreement to curb cumulative oil production between 32.5mn b/d and 33mn b/d. Delegates confirmed today that setting Opec production at the lower end of the range at 32.5mn b/d is one of the options.

Libya's governor Mohamed Oun conceded regarding Iraq's petition for an exemption. "To be frank, their situation is not different from Libya, it is in a more serious situation than Libya actually," he said, adding he was "optimistic" that opposition to the terms of the proposed deal from Iran and Iraq could be overcome.

Opec crude production was 33.64mn b/d in October, according to secondary sources, up from 33.41mn in September. Argus estimates Opec production in October to have reached a record high of 33.93mn b/d, some 150,000 b/d up on September.

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