By John Lee.
OPEC, the Organization of the Petroleum Exporting Countries, has published a revised compensation plan relating to over-production of oil in the first seven months of 2024.
The new plan (see below) compensates for over-production from January to July (inclusive), with compensation taking place from this month (August 2024) to September 2025.
It replaces a plan issued on 24th July, which was intended to compensate for over-production from January to June, with compensation starting from July.
The statement does not explain why Iraq appears to have over-produced in July, having just weeks ago agreed to under-produce in July in order to compensate.
[Editor's Note: The "tb/d" appears to be a misprint; the compensation plan matches the overproduction if we treat all numbers as volumes - "thousand barrels" - and not as rates per day. OPEC has not responded to requests for clarification.]
Statement from OPEC:
The 37th OPEC and non-OPEC Ministerial Meeting (ONOMM) held 02 June 2024 reiterated the critical importance of adhering to full conformity and the compensation mechanism.
In light of this, the OPEC Secretariat received updated compensation plans from Iraq and Kazakhstan for their overproduced volumes for the first 7 months of 2024 (January through July 2024), which totaled about 1,440 tb/d for Iraq and 699 tb/d for Kazakhstan, according to assessments made by the independent sources approved in the Declaration of Cooperation (DoC).
The table below, prepared by the OPEC Secretariat, shows in detail that the entire over-produced volumes will be fully compensated for by September 2025.
Table: Overproduction Compensation Plan for Iraq and Kazakhstan
See also: Jiyad: Proposed Oil Overproduction Compensation Raises Questions
(Source: OPEC)
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