The numbers also show that the foreign oil deals that Iraq signed in the last year have still not affected exports. On December 22 for example, the Oil Ministry claimed that production had gone up 10% or 100,000 barrels a day thanks to the petroleum companies. That may change December’s numbers when they come out next year, but so far production has remained relatively unchanged since 2008 with the output at the end of 2010 being the same as the beginning of the year. Iraq earns 90% or more of its money from petroleum.
| Month | Total Oil Earnings | Price Per Barrel | Avg. Monthly Exports (Mil/Bar/Day) |
| Jan. 10 | $4.4 bil | $73.97 | 1.92 |
| Feb. | $4.2 bil | $73.40 | 2.05 |
| Mar. | $4.3 bil | $76.20 | 1.84 |
| Apr. | $4.2 bil | $79.66 | 1.80 |
| May | $4.3 bil | $73.85 | 1.88 |
| Jun. | $3.8 bil | $71.10 | 1.86 |
| Jul. | $4.0 bil | $71.21 | 1.82 |
| Aug. | $3.9 bil | $71.43 | 1.82 |
| Sep. | $4.4 bil | $73.07 | 2.00 |
| Oct. | $4.5 bil | $77.10 | 1.92 |
| Nov. | $4.6 bil | $80.59 | 1.91 |
SOURCES
Aswat al-Iraq, “Oil ministry achieves highest production since 2003,” 12/22/10
Hafidh, Hassan, “Iraq Now Oil Revenues At $4.618B, Year’s Largest-Oil Ministry,” Dow Jones, 12/23/10
Special Inspector General for Iraq Reconstruction, “Quarterly Report to the United States Congress,” 10/30/10
7 comments:
You've got to wonder what production would look like if Iraq had a free market in oil. With all those oil deals signed last year, Iraqi production has barely budged. In the meantime, check out what's happened in South Texas in the last 12 months.
"On an actual map, the Eagle Ford shale play extends about 400 miles across South Texas in a 50-mile-wide band, from the Mexican border, below San Antonio and up into East Texas.
Though drilling has occurred in the region for decades, geologists recently discovered big deposits of oil and gas in deeper, dense rock layers once thought too difficult to reach - and it didn't long for others to take notice.
In 2010 in the Eagle Ford, 1,018 drilling permits were issued through November, up from 94 the year before, and output of crude oil, condensate and other liquids nearly quadrupled to 3.9 million barrels, according to Texas Railroad Commission data.
About 115 rigs are working in the area now, and companies so far have drilled several hundred wells."
http://www.chron.com/disp/story.mpl/business/7362773.html
Maury,
Right now the problem in Iraq is the infrastructure not the government or the new oil deals. The pipelines, ports, etc. simply can't handle any more capacity, plus the weather and attacks by insurgents affect exports as well. The southern line to Basra for example can't even handle full capacity because they're afraid it's going to break. The line is so old and decrepit that they're afraid to do full maintanence on it either, again because they're afraid it will crack.
Fact is, infrastructure wouldn't be a problem in a free market Joel. All of that infrastructure is owned and operated by the government. That means a dozen studies and several 5-year plans are necessary to get anything fixed. LOL.
A free market would have had Iraq's economy blazing full speed ahead by now. Oil production would have tripled or quadrupled. The infrastructure would be sparkling like new. I've lived in the oil patch all my life. Have been through more booms and busts than I care to remember. None of them government managed and mangled either. Iraqis are an entrepreneurial people. They have the get up and go. All they need is a government that let's them.
Maury,
I think privatizing the oil industry in Iraq is a non-starter. Iraqi nationalism would vehemently oppose it. When the CPA ran Iraq they didn't even consider it because they didn't want to create the image that the U.S. was after Iraq's oil and they knew that their would be a public outcry within the country. Even when Oil Minister Shahristani decided to sign foreign deals there was a lot of protests over it. There were a lot that argued that the Ministry could develop the industry all by itself. Many Iraqis just have a real negative view of foreign oil corporations and see them as exploitative. There are no Iraqis that have the know how or capital to do the job themselves either, even if the different state-run oil businesses were turned into private enterprises.
"There are no Iraqis that have the know how or capital to do the job themselves"
Exactly Joel. After all these years of the State running the oil sector, there are no Iraqis with the know how to drill a well. That's just pathetic. I'm not suggesting what has been drilled or piped be privatized. Let the State keep and maintain what it has, including the major oil fields that contain the bulk of Iraq's oil and gas.
BUT, an Iraqi that has a boatload of oil under his farm should be able to tap into it at his own expense. If he can't hire a rig himself, he should be able to lease the land to someone who can develop the find. As things stand, that landowner has no stake in the oil under his land. He hopes the government never finds out it's there, because then he'll lose the family farm.
What Iraq needs to do, is let a private oil industry develop alongside the woefully inefficient state enterprise. Laws can be written to limit foreign participation. Iraqis will never have the capital or experience as things stand. Texas has over a million oil wells. Iraq has a few hundred. South Texas increased oil production by 2M bpd in the last 12 months. Hundreds, if not thousands, of people made money leasing or selling their land to someone willing to take a shot at hitting black gold. This was an area thought to be tapped out long ago. If you want to do something right, you have to give people incentive.
Maury: You need a certain foundation of rule of law and peace before anything you're talking about can take place. If people make contracts with organizations much more powerful than themselves they have to have some assurance the contract will be honored and if not, that they'll get their day in court. To get private industry to invest massively in pipelines and ports, they need some assurance there is enough stability that they'll be able to profit from it tomorrow, and that the area will stay safe enough to be usable for enough time for those investments to pay off.
Your free market doesn't exist naturally, you need government-imposed rule of law and peace first.
I can't argue with that Joel. A lot of Saddam era laws are still on the books, because the government can't get its act together. I can't imagine being an Iraqi businessman trying to operate in Iraq today. Corruption is pervasive, and security is laughable. When I see so many people living below a $2 a day poverty level, it makes me want to shake someone. Iraq has so much potential, both politically and economically. They just need to shake the funk off and get the ball rolling.
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