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Iraq Set To Triple Oil Output In Six Years

Iraq Set To Triple Oil Output In Six Years
4/24/2012 7:25 AM ET

Iraq, which is currently producing more than three million barrels of crude oil per day, will increase its capacity of production to more than ten million barrels a day in the next six years.

"This is to assure the world market that there is sufficient crude for them," Iraqi Deputy Prime Minister for Energy Hussain Al Shahristani said at a special briefing after the inaugural meeting of the U.S.-Iraq Joint Coordinating Committee on Energy at the Department of Energy, Washington, DC, on Monday.

"We'd like Iraq to be considered as a dependable long-term supplier of world energy needs, whether oil or gas, and there should not be concerns of shortages in the supply in the near future," he told reporters.

Shahristani said Iraq would make a decision and announce before the year-end its production targets for the coming years. Iraq's energy chief said the government had developed infrastructure to enable it to handle more exports to the world market. Iraq has already signed 12 contracts for its 12 oil fields and three gas fields, which together have the potential to drill about 12 million barrels per day.

"Iraq is called upon to cater for the world energy needs in the coming years, and it is expected that the world will need more energy, more hydrocarbon energy, in the coming two to three decades, and Iraq is uniquely positioned to be able to provide the world with its incremental energy needs. That's why we have invited the international oil companies to work with us to develop the Iraqi resources, and the work has started based on the contracts which they signed two years ago. And the production is already increasing, and so are our export," Shahristani said.

He said Baghdad was "extremely happy with our cooperation with the United States, not only to develop our energy resources but the general Strategic Framework Agreement in a number of areas. The United States have stood beside the Iraqi people to help them free from a dictatorship, build a democracy, rebuild the country. And as we are moving into a more strategic cooperation in civil areas, we consider the energy sector as one of the most important sectors where the two countries can cooperate not only to develop and unleash Iraq's potentials in the short term, but also to look further forward to develop other sources of energy in Iraq," he added.

Many countries in the Middle East and in Europe are looking towards Iraq to cater to their gas needs. Shahristani made it clear that "Iraq is very much interested to be a partner and a supplier of gas to not only our Arab neighbors but also to the European countries and the world at large." He said the Iraqi delegation had discussed with its American counterparts cooperation in protecting the Iraqi energy infrastructure, whether on shore or offshore.

Shahristani said Iraqi officials discussed with some American companies which are interested and looking to investment opportunities in Iraq. "We welcome them and assure them that Iraq, with its new policies of - and investment incentives, is most welcoming to international companies, specifically to the American companies, to come and work not only in the energy sector but in all other sectors - in the financial sector, in the telecommunications sector, in the reconstruction, housing, and so on. There's a great potential over the coming years to work in Iraq, and we hope that this cooperation and the success that we have already had with the oil companies to develop our fields would be incentive to the other companies to come and join us in rebuilding Iraq," he said.

When asked if Exxon's decision to freeze its contracts with the KRG is enough to get it back on the list of prequalified companies for the next round, Shahristani replied in the positive.

He said the Iraqi government was pushing for the legislation of a hydrocarbon law, and clarified that it had not deterred the oil companies to sign contracts and to start working in the country. "They have already succeeded to increase production and to increase exports. And we are trying, with the oil companies that have signed contracts with us, our best to increase Iraq's production to a significantly higher level than what we are producing right now. Until the new hydrocarbon law is legislated, the prevailing laws in Iraq that have been regulating the energy sector with - the oil sector or electricity - are enforced till they are changed by a new legislation."

He said before the end of next year, Iraq would have enough power generating capacity to meet its demand with the construction of new power stations with a total capacity of 15 gigawatts. Iraq plans to build additional plants with a total generating capacity of 30 gigawatts in the coming four to five years.

Speaking on the occasion, Carlos Pascual, U.S. Special Envoy and Coordinator for International Energy Affairs, said there was still tremendous potential and opportunity for the development of energy resources within Iraq. New investments have been put online that are allowing for additional export production capacity, including a single-point mooring mechanism, a second one which has just been opened up and which a ship is, in fact, actually being loaded.

"So we look forward to the continued increase of production and export out of Iraq, but at the same time, we are encouraging all of the parties to do everything that they can so that they have clear rules of the road going into the future on how they are able to further develop their hydrocarbons resources," he added.

by RTT Staff Writer

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