Kurds Reveal Oil Data as Iraq Output Row Threatens OPEC Deal

(Bloomberg) -- Iraq's Kurds say their oil production in September was 290,000 barrels a day lower than the federal government's figures for the semi-autonomous region, as OPEC's second-biggest member tries to resolve accounting differences with the producer group over its output.

Iraq's central government says its crude oil output is several hundred thousand barrels a day higher than market analysts and the Organization of Petroleum Exporting Countries acknowledge. It published a rare breakdown of its September production data this week to support its figures. The disagreement over the figures, which would determine the size of any cuts by OPEC members, threatens to derail talks to limit the group's output.

Fields operated by the Kurdistan Regional Government produced an average of 531,000 barrels a day in September, Michael Howard, an adviser to the Kurdish minister of natural resources, said in an e-mail on Thursday. That number includes production from the Kurdish-controlled Bai Hassan and Avana fields in Kirkuk province, he said.

Iraq's state-run Oil Marketing Co., known as SOMO, put Kurdish production in September at 546,000 barrels a day. It counted Bai Hassan and Avana separately, adding a further 275,000 barrels a day to the total and creating a 290,000 barrel discrepancy with the KRG's numbers.

Double Counting

“SOMO has been double counting those key fields,” Richard Mallinson, a London-based analyst at Energy Aspects Ltd., said by phone. “It will be quite difficult for them to continue to stand by the total figures they've been giving.”

Consultants Petro-Logistics and FGE also said this week that the federal Oil Ministry was “double-counting” some fields in the region.

Iraqi Oil Ministry and SOMO officials weren't immediately available to comment. Deputy Oil Minister Fayyad Al-Nima said on Oct. 23 that the Kurdish authorities were producing more than they acknowledged, when asked at a briefing in Baghdad about the possibility of double counting.

Kurdish armed forces took control of Bai Hassan and Avana in July 2014, as Islamic State militants seized large swathes of territory in northern Iraq. The federal government doesn't recognize Kurdish control of the fields, and says they belong to the North Oil Co., a unit of the Oil Ministry.

SOMO data show Iraq's total production averaged 4.774 million barrels a day in September. Oil companies, analysts and ship-tracking data surveyed by Bloomberg gave an average estimate of 4.54 million barrels a day for the same month. OPEC put Iraq's September production at 4.455 million barrels a day.

Iraqi Oil Minister Jabbar al-Luaibi complained about OPEC data at a meeting in September in Algiers. OPEC assesses output for its 14 members based on data from oil-industry watchers. Iraq wants the group to accept the ministry's figures before a Nov. 30 meeting at which OPEC could finalize details of the Algiers accord to limit its production.

--With assistance from Angelina Rascouet To contact the reporter on this story: Sam Wilkin in Dubai at swilkin1@bloomberg.net. To contact the editors responsible for this story: Nayla Razzouk at nrazzouk2@bloomberg.net, James Herron