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Mr al-Luaibi says expects oil market to be in balance in Q1

Gasoil News - Published on Thu, 28 Dec 2017

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Reuters cited Mr Jabar al-Luaibi, Iraqi Oil Minister, as saying that he was optimistic there would be a balance between supply and demand by the first quarter of 2018, leading to a boost in oil prices. Global oil inventories have decreased to an acceptable level and there were positive signs that oil market prices would improve significantly in 2018.

Mr al-Luaibi said that “I am optimistic, and during the first quarter of next year there will be more balance between supply and demand, which will reflect positively on improving global oil prices.”

He said that a slight rise in oil production in the United States in December might have some effect on prices. Mr Luaibi was speaking at a signing ceremony with China’s state-run Zhenhua Oil. Iraq reached an agreement with Zhenhua to develop the southern portion of the East Baghdad oilfield.

Mr Abdul Mahdi al-Ameedi, who heads the oil ministry’s licensing and contracts office, said that the oil ministry expects the costs needed to develop the oilfield could reach USD 3 billion. Iraq has made significant changes to the new service contract with the Chinese company that links global oil prices and the cost of development.

Mr Luaibi said that “It’s a new contract with new amendments which we made to overcome the chokes and lapses in our previous service contracts.”

Mr Ameedi said that the new contact will allow Zhenhua to receive a USD 3.5 fee for each barrel of crude produced from the oilfield, and will serve as a model for all upcoming contracts with international companies.

He said that “The East Baghdad contract was drafted in a way to significantly minimise the cost of oilfield developments. This contract will be a model for the following oil deals.”

He added that Iraq plans to utilise 20 million cubic feet of gas produced as a by-product of oil production from the East Baghdad oilfield to supply a nearby power station.

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Posted By : Rabi Wangkhem on Thu, 28 Dec 2017
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