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Iraq says still set on expanding oil output to gain market share

Published 27/08/2016, 18:21
© Reuters. Iraqi Oil Minister Jabar Ali al-Luaibi speaks during a news conference during his visit to the oil field of Zubair, in Basra, Iraq

By Maher Chmaytelli

BAGHDAD (Reuters) - Iraq is willing to play an active role within OPEC to support oil prices but will not sacrifice its goal of expanding market share and will continue to ramp up output, its oil minister said on Saturday.

Jabar Ali al-Luaibi, on a visit to the southern oil city of Basra, renewed calls for local and international oil companies in Iraq to increase production and announced plans to double crude storage capacity at the country's southern export terminals to 24 million barrels in the "coming years" from 12 million barrels currently.

"The ministry has new ambitious plans to develop the oil sector," he told reporters. "Among them, the most important is to increase crude output to reach a level that suits Iraq's needs; we don't want to specify a ceiling for future production like in the past."

Luaibi, who became oil minister this month, said Iraq wants to "strengthen OPEC's role in achieving a balance in the oil market," but his comments on continuing to increase output suggested it was not looking to take part in a possible agreement to freeze output.

"Iraq is seeking to play an active role in order to support oil prices while preserving a share that is proportionate to its reserves," Luaibi said.

Members of the Organization of the Petroleum Exporting Countries are due to meet informally in Algeria next month on the sidelines of the International Energy Forum (IEF). Russia is also expected to attend the IEF.

Iraq's production currently stands at around 4.6 to 4.7 million barrels per day for the whole country, including the self-rule Kurdish region in northern Iraq, Luaibi said.

Iraq's Prime Minister Haider al-Abadi on Tuesday said the country has not yet reached its full oil market share, suggesting his government is not willing to restrain crude output.

OPEC's second-largest producer, trailing Saudi Arabia, Iraq depends on oil sales for 95 percent of its public spending. Its economy is reeling under the double impact of low oil prices and the rising cost of the war on Islamic State militants.

The government has invited international oil companies to express interest in the country's plan to expand four of its refineries, oil ministry spokesman Asim Jihad said separately on Saturday.

The government would consider investment offers on a build-own-operate or build-operate-transfer basis for the refineries, which are located in Kirkuk, in northern Iraq, and the southern regions of Samawa, Kut and Basra, the spokesman said.

Sources in OPEC and the oil industry this week told Reuters that Iran, OPEC's third-largest producer, was sending positive signals that it may support joint action to prop up the oil market.

© Reuters. Iraqi Oil Minister Jabar Ali al-Luaibi speaks during a news conference during his visit to the oil field of Zubair, in Basra, Iraq

Tehran refused to join an attempt in April to freeze output at January levels, scuppering those talks because Saudi Arabia said it wanted all producers to join the initiative.

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