Iraq Delays Oil Production Capacity Boost on Lower Prices, OPEC Cuts

By Benoit Faucon 
 

BERLIN--Iraq has delayed a sharp boost to its production capacity by more than a year due to lower oil prices and OPEC output curbs, a top Iraqi oil official said Tuesday.

The setback 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 foreign operator. The official also said Iraq is in discussions ExxonMobil (EXOM) 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, while natural-gas fields also would be put for tender soon.

Write to Benoit Faucon at [e-mail]

(END) Dow Jones Newswires

February 27, 2018 07:35 ET (12:35 GMT)

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