After signing a number of petroleum deals with international corporations in 2009 and 2010 the Iraqi Oil Ministry plans a massive increase in production. Oil Minister Hussein Shahristani has promised 12 million barrels a day, up from the current 2.5 million barrels by 2017. Few experts and oil executives believe this is possible however within that time frame.
Since 2009 Iraq’s Oil Ministry has consistently talked about a boost in output. In September 2010 Minister Shahristani predicted a 4.2% increase by the end of 2010. After that the country was to reach 4 million barrels a day in 2013, and finally 12 million by 2017.
No experts interviewed in the press believe those benchmarks are possible. At the end of October 2010 Reuters conducted a survey of ten banks, analysts, and universities. They believed that 2.8 million barrels by 2011 and 4.6 million by 2015 were more realistic. The Economist Intelligence Unit had the highest mark of 6.02 million barrels by 2016. In mid-November the International Energy Agency predicted 6.5 million barrels, but not until 2030. Finally, at the end of November an adviser to Prime Minister Nouri al-Maliki said that the country would only reach 8 million barrels by 2017. All of those questioned had the same reasons for their skepticism; Iraq lacks security, political stability, infrastructure, and leadership to manage such a large increase. One oil consultant said that Iraq’s planned investment in drilling exceeded the country’s capabilities. Another said Iraq needs roads, bridges, airports, and a steady water supply, not just improving its oil industry. Iraq is moving ahead with plans to expand its ports, pipelines, and other parts of the petroleum supply chain, but there are always questions about whether the country has enough financing, and can finish any of the work on time and competently.
With foreign help Iraq’s oil production will undoubtedly go up. It’s just a question of how much and how fast. Despite Oil Minister Shahristani’s prediction of immediate results following the signing of petroleum contracts with international companies, there has not been any noticeable increase as of November 2011. The nation’s current pipelines and port can’t handle any large up tick as well until they are expanded. Experts seem to agree that 5-6 million barrels a day in 5-10 years would be a much more realistic mark. Iraq wants to return to the international oil market in a big way, and be a leader in OPEC like it used to be before twenty years of wars and sanctions devastated its industry. Unfortunately, those lost years will be hard to make up, and even if Iraq produces half of what it wants to it will probably not be a game changer any time soon.
Predictions Of Iraq's Future Oil Production (Avg. Millions/Barrels/Day)
|Former Oil Minister Chalabi||6.0|
|PM Maliki Adviser||8.0|
|Dunia Frontier Consultants||2.5||3.0||3.5||4.0||5.5|
|Iraq Energy Institute||2.75||3.1||3.8||4.2|
|Economist Intelligence Unit||2.65||2.87||3.14||3.49||4.21||6.02|
|London School of Economics||3.2||3.8||4.3||4.5||4.5|
|Neftex Petroleum Consultants||3.0||3.9||4.0||4.2||4.4|
|Oil Company (Unnamed)||2.7||3.0||3.8||4.5||5.5|
Lewis, Barbara and El Gamal, Rania, “POLL-Iraq oil output seen edging up, not yet game-changer,” Reuters, 10/28/10
Pamuk, Humeyra, “Iraqi oil output plans overambitious – executives,” Reuters, 10/13/10
Razzouk, Nayla, “Iraq’s October Oil Export Revenue Reaches Highest Level in Year,” Bloomberg, 11/26/10
Reuters, “UPDATE 2-Iraq oil output may hit 8 million bpd by 2017,” 11/29/10
UPI, “IEA says Iraq’s oil boost plan a fizzle,” 11/4/10