Iraq, which has had trouble keeping up with cuts it agreed on with other key crude exporters, known as OPEC+, has reportedly asked BP to reduce production at its supergiant oil deposit so as not to miss the target level again.
The international oil giant was asked to lower production at Rumaila oilfield by at least 10 percent, according to Bloomberg.
Rumaila is the third-largest producing field in the world and now delivers nearly a third of Iraq’s oil – around 1.5 million barrels per day (bpd). Apart from BP, the massive field is also developed by national Iraqi firm, Basra Oil Company (BOC), as well as another foreign player, PetroChina.
The 13 members of the Organization of Petroleum Exporting Countries (OPEC) and 10 allied oil exporters led by Russia, together known as the OPEC+ group, decided last week to keep the historic output cuts in place until the end of July to further prop up prices. According to the initial agreement, signed in April, global production was set to remain around 10 million bpd lower in May and June, before the curbs were set to be eased by around two million bpd.
Despite the cuts having helped boost crude prices, they haven’t been enough to rebalance the energy market due to the devastating impact of the coronavirus pandemic on global demand and some members’ failure to stick to the terms of the deal.
Together with some other nations, Iraq, the second-largest OPEC producer, exceeded its quotas by around 600,000 barrels a day. Now it will have to compensate for the overproduction in addition to regular curbs. Tehran has pledged full commitment to the new OPEC+ deal despite the challenges the country faces, but some analysts still fear that the promise is not realistic due to the economic situation in the country.
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