Iraqi field-level production data appears to show it has deepened crude output cuts, but methodology changes are the more likely explanation. And data from international oil firms show output from the semiautonomous Kurdistan region to be much higher than the federal government's estimate.
Baghdad is facing pressure to improve its compliance with the production deal struck between Opec and several non-Opec countries. Argus estimates Iraqi output has been 4.45mn b/d so far this year, making it just over 50pc compliant, compared with Opec's overall 101pc compliance rate. Iraq agreed to cut output by 210,000 b/d from an October 2016 baseline figure determined by secondary sources, including Argus, to 4.35mn b/d until March next year. Production data from the federal government in Baghdad put output at 4.54mn b/d this year.
Iraq's low compliance led to an appearance before a joint ministerial monitoring committee meeting earlier this month to discuss its future production plans. Saudi Arabia's oil minister Khalid al-Falih made comments after a meeting with his Iraqi counterpart Jabbar al-Luaibi on 8 August that could be interpreted as a public hint that Iraq needs to improve its compliance.
Iraq's production published two days later in Opec's latest Monthly Oil Market Report (MOMR) showed output at 4.4mn b/d in July, down by 150,000 b/d from June. A regional breakdown for July, provided by the oil ministry, shows a decline of 374,000 b/d when compared with the previously-published breakdown for September 2016, before the Opec agreement. The biggest fall comes from state-owned North Oil, (NOC) followed by the Kurdistan region (see table).
An explanation for the large drop from NOC could be a methodology change. The ministry's September figure for NOC included production from Bai Hassan and Avanah Dome, in Kirkuk, even though these fields were taken over by the KRG in 2014 to prevent them falling to Islamist group Isis. Production from the two fields totalled 275,000 b/d in September last year.
Data from the Kurdistan Regional Government (KRG) placed the region's output at just over 560,000 b/d for the same month in 2016, similar to the federal government's estimate but including production from Bai Hassan and Avanah Dome.Wisconsin refinery: small Calumet Specialty refinery to be bought by Husky Energy for $435 million.
Husky produces primarily heavy oil from oil sands and conventional operations in western Canada and the deal will help it manage exposure to depressed global crude prices, which are hovering below $50 a barrel on concerns about a persistent supply glut CLc1.
Husky said it would retain about 180 workers at the refinery, which can process Canadian heavy crude and light and medium barrels from Canada and the Bakken region, and also boosts the company's asphalt production capacity.Alibaba. Huge beat.
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The stars may finally be aligning for two related crude oil infrastructure projects that, if undertaken, would provide an important new pathway to overseas markets for Bakken, western Canadian and other North American crude. The first would involve reversing the Capline Pipeline, which was built to transport crude north from the U.S. Gulf Coast to Midwest refiners.
The second would make modest physical changes to the Louisiana Offshore Oil Port — better known as LOOP — to allow the crude import facility off the Bayou State coast to load crude onto ships, including Very Large Crude Carriers (VLCCs). Today we look at the new infrastructure and market forces that may finally spur Capline’s reversal and lead imports-focused LOOP to enable exports.