Iraq can’t count on Kurds to meet oil cuts

Bloomberg

Iraq can’t count on self-governed Kurds in the country’s north or international oil companies to help it cut crude production as promised at an OPEC meeting last week. That may leave the country with no option but to slash state-controlled supplies to comply with its quota.
Under the deal the Organization of Petroleum Exporting Countries reached last Wednesday, Iraq must reduce crude output by 210,000 barrels a day from October levels. Uniquely among OPEC members, it shares production with a semi-autonomous region that accounts for about 12 percent of its total output. International companies including BP Plc and Royal Dutch Shell Plc pump most of the rest.
“It looks complex for Iraq to deliver all the cuts it signed up to,” Richard Mallinson, an analyst at consultant Energy Aspects Ltd, said by phone from London. “In most cases the international oil companies will probably not be ready to do it on their fields.”
OPEC’s first production cuts in eight years will be a shock for Iraq. The group’s second-largest producer has had no output target since the 1990s, to help it recover from a series of conflicts. Iraq resisted having a target ahead of last week’s OPEC’s meeting, arguing that it needed every dollar to fight IS, but relented under pressure from other members.
Oil Minister Jabbar Al-Luaibi had disputed OPEC’s data on Iraqi production levels and insisted he wouldn’t agree to a cut. He eventually conceded on both points at last week’s meeting after placing a phone call to Prime Minister Haider Al-Abadi, who supported the deal, according to two OPEC delegates.