Iraq, gaining on Iran as OPEC's second- argest oil producer, is at least 2 years away from reaching an output level that will prompt a debate within the producer group on setting Baghdad's individual output quota.
Mr Thamir Ghadhban energy adviser to Iraq's prime minister said that analysts had spoken of the possibility of conflict within the Organization of the Petroleum Exporting Countries after Iraq regains a leading role.
Iraq was outside OPEC's agreements to set oil output levels for years until December when it became included in an overall OPEC target to pump 30 million barrels per day. But OPEC has not divided up that into individual output quotas for its 12 members baulking at the delicate topic.
Ghadhban said that “This issue is not of immediate concern within OPEC as we are still 2 years away from reaching production capacity exceeding 4 million barrels per day. OPEC's quota debate will draw in Iran, which before the 1990 to 1991 Gulf War had parity with Iraq. The stated output capacity of Iran is about 4 million barrels per day.”
OPEC said that it would trim output that members were pumping above the 30 million barrels per day target to bolster the price of oil, which has slid by USD 30 per barrel since March to below USD 98 per barrel on Monday. But the lack of individual quotas could make it harder for OPEC to convince the market it is serious about curbing output.
Mr Ghadhban said that Iraq was exempt from OPEC's output quotas for years because of war and sanctions. The last time Iraq had a quota was in June 1990, when both Iran and Iraq had targets of 3.14 million barrels per day.
Baghdad's oil expansion program has already pushed its oil supplies to 3 million barrels per day a level last pumped before Iraq invaded Kuwait in 1990 and just a touch below Iran, where output has sunk to a 20 year low because of Western sanctions.
He said that Iraq's production capacity will reach 3.4 million barrels per day by the end of the year. By 2014, it is expected to hit 4.5 million barrels per day. It won't be long before Iraq takes second place in OPEC. The expansion of Iraq's production and export capacity is now a reality.
Source - Reuters
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