Iraq Delays Oil Production Capacity Boost on Lower Prices, OPEC Cuts -- Update
February 27 2018 - 12:52PM
Dow Jones News
By Benoit Faucon
BERLIN--Iraq is delaying a sharp boost to its production
capacity by more than a year due to lower oil prices and OPEC
output curbs, along with its first oil-field tender since 2012, a
top Iraqi oil official said Tuesday.
The slowdown underscores the challenges Iraq's recovering oil
industry faces as it seeks to attract investments from Western oil
giants following the defeat of Islamic State.
Abdulmahdy al-Ameedi, director general of oil contracts and
licensing at Iraq's oil ministry, said the country was set to
increase its production capacity to 5 million barrels a day next
year, more than a year later than initially planned.
Speaking to reporters on the sidelines of the Iraq Petroleum
conference in Berlin, he said international oil companies had
delayed investments due to lower oil prices and more recently
because Iraq had agreed to curb its output as part of a pact with
the Organization of the Petroleum Exporting Countries.
Oil majors have also complained of late payments and tough
contracts, an issue Mr. Ameedi said the government wants to resolve
by improving terms.
He later said the Iraqi government was ready to link repayments
on oil production to price movements, instead of the previous fixed
fee.
Royal Dutch Shell PLC (RDSA.LN) decided to pull out of the giant
Majnoon field last year. But the official said Iraq is in talks
with Chevron Corp. (CVX) and Total SA (FP.FR) to replace Shell in
the project, but that the government may still develop the field
without a foreign operator. The official also said Iraq is in
discussions with ExxonMobil (XOM) on joining the Southern
Integrated Project, which will involve oil-field development and
refining.
He said nine new blocks were currently offered near the Kuwaiti
and Iranian borders. But he said bids would not start being
accepted on May 7 as previously planned because they will clash
with national and provincial elections. Members of the cabinet will
be focused on campaigning and may also change, delaying the
decision process, he said. He also said a set of natural-gas fields
also would be put for tender soon.
Write to Benoit Faucon at benoit.faucon@wsj.com
(END) Dow Jones Newswires
February 27, 2018 12:37 ET (17:37 GMT)
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