IBN: Iraq Aims to Join OPEC Quota System by 2014

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IBN: Iraq Aims to Join OPEC Quota System by 2014

Bloomberg reports that Iraq will ask to rejoin OPEC’s quota system for crude output in 2014.

The holder of the world’s fifth-largest oil reserves plans to increased production from an average of 2.9 million barrels a day to 3.4 million barrels a day next year, and 4.5 million barrels a day in 2013, said Falah al- Amri, director of the State Oil Marketing Organization (SOMO). The government ultimately intends to boost production to 12 million barrels a day by 2017.

“We will seek the biggest possible quota,” al-Amri said.
Iraq is exporting an average of 2.2 million barrels a day this month and earning an average price of $104 a barrel, he said in an interview in the southern city of Basra.

Iraq is the only member of the Organization of Petroleum Exporting Countries currently exempt from output quotas.

“Iraq will effectively be taking other countries’ market share” when it re-enters the OPEC system, Samuel Ciszuk, an energy analyst at IHS Global Insight, told Bloomberg. “It will become a source of tension for the group, especially given the very low level of trust that exists there now … Iraq will aim to have a quota slightly higher than what Iran will have, since Iraq says they have higher reserves.”

His stated target date of 2014 conforms with the group’s own forecasts. Secretary-General Abdalla El-Badri said in 2010 that OPEC would start discussing the matter in “four to five years.”

Iraq ships oil mostly to China, India and other Asian countries, said al-Amri.
(Source: Bloomberg)

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