Iraqi Oil minister says prices to pick up in second half of 2015

By Shaymaa Adel

Azzaman, January 20, 2015

Oil prices, which have lost nearly 50% of their value in the past six months, will start increasing in the second half of 2015, Oil Minister Adel Abdulmahdi said.

But the minister added oil producing countries may not see prices in the range prior to their collapse in June last year when a barrel fetched more than $100.

Abdulmahdi made the remarks as the country was reeling from the impact of falling oil prices and a widening budget deficit.

The minister tried to assure Iraqis that their revenues from oil sales will almost be the same due to his ministry’s success in increasing output which he said would reach 4 million barrels per day in 2015.

“Oil output will reach four million barrels daily this year following the agreement with the Kurdish region,” he said. “Iraq exerted great efforts and massive resources” to increase its production.

The Kurds have accepted to have the Oil Ministry and its oil export arm, SOMO, oversee their own exports with royalties funneled to Iraq’s Central Bank.

Abdulmahdi said Iraq’s exports have been in the range of 3 million barrels in the past few months.

“The surge in oil production volume will offset the drop in prices and buttress the budget,” he said.

The minister said new oil fields like Nasiriya and Gharraf have added up to 300,000 barrels a day to the country’s output.

“The second or the last half of this year will see a hike in the prices of oil but they will not reach the level of the past years,” he said.