The head of Russian oil company Lukoil, Vagit Alekperov, said that the firm has not received any directives from the Iraqi government in Baghdad to curb oil production for 2017, United Press International reported.
Accordingly, Lukoil does not have plans to cut production at its West Qurna-2 oil field, located in southern Iraq, which has an output rate of potentially 400,000b/d of oil. This comes as Lukoil’s Vice President, Leonid Fedun, had said earlier that the company was in talks with Iraq on reducing oil production in the country, according to Hellenic Shipping News. He had added that Lukoil will freeze output, if the Organization of the Petroleum Exporting Countries (OPEC) makes such a decision at its November 30 meeting in Vienna and Russia joins it.
As a member of OPEC, Iraq agreed to cut oil production to 4.35mb/d starting January 2017. An OPEC deal reached late November to curb output is aimed at restoring balance to a market favoring the supply side. Iraq reported to OPEC its total crude oil production in November was 4.8mb/d. Therefore, the group’s agreement with Iraq uses this volume as its benchmark to fix oil output from the country. However, Iraq’s commitment was hard to come by as the government said it needs revenue from oil to finance the fight against the Islamic State terror group.