Iraq’s Deputy Prime Minister for Energy Hussain al-Shahristani has told a conference that plans to develop oil production are “going faster than contracted.” While exact details of the advance have not been released, Iraq’s ambitious energy plans could establish the country as a major exporter to rival Saudi Arabia.
Current crude oil production in Iraq is estimated to be around 2.1 million barrels per day (b/d), the majority of which come from the southern oil fields around Basra. Plans recently unveiled by the Energy Ministry have called for production to be raised to 3 million b/d before the end of the year, climbing to 3.3 million b/d in 2012, and 6.5 million b/d by 2014.
New export facilities are currently being developed to handle the projected boost in production. Plans to develop the energy export infrastructure include a new pipeline connecting the southern fields to Syria and Turkey, and at least four new seaports. “We are comfortable that new export outlets will be ready to receive extra crude according to the plans to boost oil production with the contracted oil companies,” said al-Shahristani.
The production increase is being developed by foreign resource companies, who are expected to invest in excess of US $150 billion into the local energy infrastructure. However, the plans have been criticized for being over-ambitious in terms of scheduling by analysts and the IMF, who have said that a longer time-frame is more feasible. Minister al-Shahristani has remained undeterred by the criticism, responding by saying “The government believes also that the contracted oil companies are serious in carrying out their contractual obligations …We believe that this goal is realistic and feasible, as currently, there are no signs we will not be able to achieve this goal in a timely manner.”
Despite the Ministry’s reassurances about the advances in Iraq’s preparedness, National Oil and Gas Committee Chief Adnan al-Janabi recently called for a postponement to the auctioning of Iraq’s gas fields. Al-Janabi has said that any contracts resulting from the series of auctions, set for January next year, “would be illegal” due to Iraq’s standing energy legislation. “If the Oil Ministry proceeds with its plans, it will not be acting legally, and any signing parties will do so at their peril,” the committee chief told reporters. Janabi warned that “the Ministry…have set lofty claims for production targets, with still little progress on the ground, and serious investments required in supporting infrastructure.”
For further information about Move One’s capabilities in the region, please contact Erik Hemphill, Regional Manager for the Middle East at erik.hemphill@moveoneinc.com.
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