Oil Production Remained Flat In 2010, But Revenues Were Up

Most of the numbers for Iraq's 2010 oil production have now been released. Overall output and exports have remained largely the same since 2008 because of aging infrastructure that is operating at capacity, bad weather, and occasional attacks upon the northern pipeline heading to Turkey. Despite the lack of growth in the industry for the last three years, Iraq has benefited from increasing oil prices in 2010 that boosted revenues.

2010 saw very little variation in output and exports. Production reached a high of 2.46 million barrels a day in January, and a low of 2.25 in March, while exports saw their highest mark in February at 2.05 million barrels, and the lowest in April at 1.80 million. For the year, Iraq averaged 2.36 million barrels a day in production, and 1.89 million barrels a day in exports. That was slightly down from 2009's marks of 2.40 million barrels in output and 1.90 million in foreign sales.

Prices for Iraqi crude rose and fell throughout the year. In January, a barrel went for $73.97. It then rose to $79.66 in April before dropping to around $71 from June to August. At the very end of the year, prices began to creep back up reaching an annual high of $86.31 in December. Since then, international prices have begun to decline in January.

Due to the rising prices Iraq earned more money last year than 2009. In June, Iraq earned the lowest monthly amount at $3.889 million. The highest revenue was in December with $5.222 million, coinciding with the highest price for the year. Overall the country earned $52.2 billion for the year, compared to $41.3 billion in 2009. That was despite the fact that Iraq produced a total of 689.9 million barrels of petroleum in 2010 compared to 695.5 million in 2009.

Recently, the Oil Ministry claimed that Iraq had reached a new post-invasion high in production due to the work of foreign oil companies. In January, 2011, Oil Minister Abdul Karim Luaibi said that the nation was pumping 2.7 million barrels a day. That was due to a 20% increase in output from the Rumaila oil field, run by British Petroleum and the Chinese National Petroleum Corporation (CNPC), and a 45% boost at the Zubayr field, operated by Italy's Eni. West Qurna 1, which has a contract with Exxon Mobile also saw a modest rise. The Ministry is hoping to reach 3 million barrels a day by the end of the year. Energy analysts have stated that this should be possible, but Iraq's much larger goal of 12 million barrels a day by 2017 is impossible due to the lack of adequate resources and infrastructure in the country. Baghdad itself has begun to scale back its goals, with a more modest 8 million barrels goal. There are some experts that even question that mark due to how much time, money, work, and decisions Iraq has to go through to achieve a major boost in its output. In the end however, even more modest growth will provide Iraq with much higher revenues, which are desperately needed to develop the rest of the country.

2010 Oil Production - Exports
Jan. 2.46 - 1.92
Feb. 2.44 - 2.05
Mar. 2.25 - 1.84
Apr. 2.38 - 1.80
May 2.35 - 1.88
Jun. 2.41 - 1.86
Jul. 2.30 - 1.82
Aug. 2.32 - 1.82
Sep. 2.35 - 2.02
Oct. 2.35 - 1.91
Nov. 2.35 – 1.92
Dec. 2.41 – 1.95

Month	Production (Mil/Bar)	Revenue (Mil)	Avg. Price Per Barrel
Jan.	59.7	$4.4416	$73.97
Feb.	57.9	$4.229	$73.04
Mar.	57.1	$4.351	$76.20
Apr.	53	$4.222	$79.66
May	58.7	$4.335	$73.85
Jun.	54.7	$3.889	$71.10
Jul.	56.3	$4.009	$71.21
Aug.	55.4	$3.957	$71.43
Sep.	60.6	$4.428	$73.07
Oct.	58.7	$4.526	$77.10
Nov.	57.3	$4.618	$80.59
Dec.	60.5	$5.222	$86.31

2003-2010 Yearly Oil Production/Export Averages (Million Barrels Per Day)
2003 1.43/0.79
2004 2.25/1.47
2005 2.07/1.36
2006 2.12/1.50
2007 2.11/1.66
2008 2.41/1.84
2009 2.40/1.90
2010 2.36/1.89

Iraqi Oil Production/Exports 2003-2010

SOURCES

Bureau of Near Eastern Affairs, "Iraq Status Report," U.S. Department of State, 1/13/10
- "Iraq Status Report," U.S. Department of State, 5/5/10
- "Iraq Status Report," U.S. Department of State, 12/15/10

Dow Jones, "UPDATE: Iraq 2010 Oil Exports Down 0.8% On Year –Oil Minister," 1/26/11

Hafidh, Hassan, "Iraq Now Oil Revenues At $4.618B, Year's Largest-Oil Ministry," Dow Jones, 12/23/10
- "Iraqi Oil Output Increases," Wall Street Journal, 1/8/11

Iraq Business News, "Iraq Oil Exports: 2011 Volume Down, Revenue Up," 1/27/11

Rasheed, Ahmed, "ANALYSIS-Tougher times ahead for oil firms in Iraq," Reuters, 1/24/11
- "UPDATE 2-Iraq plans 4^th bidding round for gas contracts," Reuters, 1/2/10

Razzouk, Nayla, "Iraq's October Oil Export Revenue Reaches Highest Level in Year," Bloomberg, 11/26/10