By Ahmed Mousa Jiyad.
Any opinions expressed are those of the author, and do not necessarily reflect the views of Iraq Business News.
Analyzing December 2016 data prompts three disturbing remarks:
- First, there is more than 128% difference between what the Minister of Oil and the DG of SOMO said on how much Iraq should cut its production to comply with OPEC requirements*;
- Second, the breakeven Iraqi export oil price should be at least $48.37/b sustained during the first half of 2017 to compensate OPEC production cut burden;
- Third, there is a possibility that the magnitude of OPEC cut could prevent Iraq from attaining the export threshold adopted by Budget Law 2017, leading to increasing the breakeven price further to a minimum of $49.40/b.
So far, the Ministry of Oil did not outline, formally and publically, how it could deal with OPEC cut; worst still there is very significant and disturbing divergence on even how much cut has to be done: 210kbd or 479kbd!
Furthermore, by keeping silent, irresponsive, preventing the publication and disclosure of any related data (except for foreign media) and completely non-transparent could only make things difficult for Iraqi citizens to know what is going on regarding this vital matter; and surely they are entitled to ask who should be held accountable for this mismanagement of their natural resource!
Mr Jiyad is an independent development consultant, scholar and Associate with the former Centre for Global Energy Studies (CGES), London. He was formerly a senior economist with the Iraq National Oil Company and Iraq’s Ministry of Oil, Chief Expert for the Council of Ministers, Director at the Ministry of Trade, and International Specialist with UN organizations in Uganda, Sudan and Jordan. He is now based in Norway (Email: mou-jiya(at)online.no, Skype ID: Ahmed Mousa Jiyad). Read more of Mr Jiyad’s biography here.