Page 4 - MEOG Week 14 2022

MEOG COMMENTARY MEOG

Iraq provides Majnoon update

as oil earnings hit 50-year high

As Iraq’s oil earnings reach record highs, the country is pushing
forward with the development of one of its largest oilfields.

IRAQ THE Iraqi Ministry of Oil (MoO) posted its below its 4.37mn bpd quota, which rises to
highest takings in fifty years as the country and 4.414mn bpd this month and 4.461mn bpd in
other OPEC+ members reap the benefits of their May.
WHAT: agreement. Meanwhile, the ministry provided a The drop was the result of 12 days of main-
Iraq’s oil earnings surged progress report on ongoing work to expand oil tenance at the supergiant West Qurna-2 (WQ-
to $11.07bn in March as production capacity at the supergiant Majnoon 2) oilfield and a week of shutdown at Nasiriyah
market concerns saw oil oilfield in the southern Basra Governorate. because of protests, both early in the month.
prices hit $139. As OPEC’s second-largest producer, Iraq WQ-2, which is operated by Russia’s Lukoil
stands to benefit more than most from the and North Oil Co. (NOC), a subsidiary of the
WHY: group’s alliance with Russia and other produc- Iraqi National Oil Co. (INOC), has a capacity
The OPEC+ agreement ing nations that has seen oil prices surge as geo- of around 400,000 bpd but was taken offline on
has served to balance the political concerns collide with supply/demand February 21 as part of ongoing expansion works
market while benefiting dynamics. However, the country’s oil produc- that are due to add a further 50,000 bpd to capac-
the economies of oil- tion has struggled to keep up with its quota and ity. WQ-2 forms the smaller of two development
producing nations as issues at major fields exacerbated these problems projects to tap the West Qurna deposit, which
they recover from the in March, as output fell 222,000 barrels per day has estimated oil reserves of around 33bn bar-
pandemic. (bpd) off its target. rels, with West Qurna-1 (WQ-1) to the south
holding the larger, 20bn barrel share.
WHAT NEXT: Oil earnings Meanwhile, Nasiriyah was shut in on Febru-
While Iraq has struggled This week, the MoO reported that March oil ary 25 by fellow INOC subsidiary Dhi Qar Oil
to meet its production revenues had come in at $11.07bn on a total of Co. (DQOC) after protesters blocked workers’
quotas, work is being 100.56mn barrels exported. Baghdad’s receipts access to the site. Capacity there is believed
carried out in earnest were the highest since 1972 and a significant to stand at around 70,000 bpd, also from the
as it looks to expand increase on the $8.5bn earned in February, Mishrif formation, though production over the
capacity. which itself was an eight-year high. last two years has been hamstrung by Baghdad’s
The heightened earnings come despite Iraq efforts to comply with OPEC+ output restric-
failing to keep up with its OPEC+ quota as out- tions. The field has estimated reserves of 4bn
put fell by 112,000 bpd compared to February. barrels.
Production averaged 4.15mn bpd in March, With both fields back in operation,

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