Iraq is not planning to reduce its ambitious 12mn bpd crude production capacity target by 2017 to levels between 6.5mn bpd and 7mn bpd according to Deputy Prime Minister for energy, Hussain al-Shahristani.
Shahristani refuted reports of any possible reductions when he was quoted as saying by Reuters. "Absolutely not. There is no intention at all to renegotiate the contracts."
Shahristani's comment followed speculation that Iraq might have to officially slash its longstanding production capacity target of 12 million bpd and renegotiate contracts with international oil companies to reduce their individual output targets.
According to Samuel Ciszuk, IHS Senior Middle East Energy analyst: " Such a move could lower the investment needed in the years ahead to 2017 and hence dramatically slash the capital expenditure (capex) costs that IOCs will recover under the Iraqi technical service contracts (TSCs).
"We are contracted for announced production capacity of around 12 million bpd," he said."But how much we will produce, really, this depends on the international market situation and the market demand." Iraq is currently producing around 2.6-2.7 million bpd of crude.
Samuel Ciszuk, argued: "The announcement of a possible target and contract revision is therefore looking like a test balloon, attempting to gauge the political fallout from massively reducing Iraq's production targets—mainly within the country."