LONDON: OPEC is expected to roll over a deal on cutting supplies at a meeting next week and discuss deepening the curbs that have been in place since Jan 1, Iraq’s oil minister yesterday. A deal between the Organization of Petroleum Exporting Countries and allies including Russia to curb output by 1.2 million barrels runs out at the end of June. Meetings on July 1-2 in Vienna will discuss the next steps.
“The rollover at least would be at the same level because it has not been very effective, it has been effective to a certain level to minimize the glut in the market, but there are now ideas or calls for agreeing (on) even more,” Oil Minister Thamer Ghadhban said. He said the issue would be discussed in Vienna but declined to specify what alternative level of cuts were being suggested.
Sources said this month that Algeria had floated an idea of deepening the cut by some 600,000 bpd. Ghadhban also told reporters in London that Exxon had completed an evacuation of its staff from an oilfield in southern Iraq for security reasons. Contractual wrangling and security concerns have held back a $53 billion deal with the US energy giant to boost Iraq’s oil output at its southern fields, Iraqi government officials have said.
Ghadhban said on the sidelines of the CWC Iraq Petroleum Conference in London that the two sides were drawing up a heads of agreement, adding one snag related to pricing and inflation adjustments remained. “We are now working on final draft of our agreement. The point has to do with pricing, inflation and deflation, related to cash flow how to look at the price and returns. It’s purely a technical point, not political,” the minister said.–Reuters