Erbil, Baghdad agree to cut oil output amid OPEC+ deal

"We agreed on cutting oil production in line with OPEC+'s decision."

Halgurd Sherwani 2020/04/19 13:12

kurdistan OPEC+ Iraq Kurdistan Region Oil Budget Kirkuk

ERBIL (Kurdistan 24) – The Kurdistan Regional Government (KRG) and the federal Iraqi government have agreed to cut oil output in line with a new deal between top oil producers to lower global supply, a senior KRG official said on Sunday.

The announcement came from Kurdistan Region Finance Minister Awat Sheikh Janab during a press conference in Baghdad following a round of meetings between a KRG delegation and senior Iraqi officials.

The high-level KRG delegation consists of Sheikh Janab, Minister of State Khalid Shwani, and the KRG Chief of Staff Umed Sabah. They visited Baghdad with the stated aim of discussing a series of issues of mutual concern, chief among them the Kurdistan Region's share in the Iraqi budget, Baghdad's role in the new oil output cut deal between the Organization of Petroleum Exporting Countries (OPEC) and non-OPEC member states, known collectively as OPEC+.

"We agreed on cutting oil production in line with OPEC+'s decision," said Sheikh Jabnab during the press briefing, attended by Iraqi Oil Minister Thamir al-Ghadhban.

"We agreed in principle that we [the Kurdistan Region] are part of Iraq, and Iraq's compliance is also our responsibility," Sheikh Janab said in response to a Kurdistan 24 question, without revealing further details.

Iraq has agreed to gradually cut its production by close to 23 percent starting in May. Iraq pumps an average of 4.5 million barrels of oil a day, a portion of which is from the KRG. It is unclear by how much the KRG has agreed to reduce its output.

"We also agreed on developing the natural gas fields in a mutually beneficial way that also can have a positive impact on power generation," the finance minister affirmed.

"We agreed to increase electricity supply to both Kirkuk and Mosul," Sheikh Janab remarked. The KRG has been partially supplying the energy demands of Kirkuk and Nineveh provinces.

"We are optimistic that we will overcome the crisis that [Iraq] is facing," Sabah told reporters.

"We are still obligated to send [the Iraqi government] 250,000 barrels of oil per day as part of our deal with Baghdad," Shwani told Kurdistan 24.

"Our political message to Baghdad is that we want to confront this economic crisis together [Baghdad and Erbil]," the State Minister affirmed.

Editing by Kosar Nawzad