Sudani Govt Wants To Make Iraq More Oil Dependent

(Essam  Al-Sudani)

Every Iraqi government since 2003 has followed the same script when it comes to the economy. They give lip service to wanting to diversify the economy and promote the private sector. No real effort is ever put into those goals. All Baghdad really does is continue its plans to develop the petroleum sector so that the most oil dependent country in the world becomes even more reliant.

 

On August 26 parliament’s oil committee said it supported Prime Minister Sudani’s plan to increase oil production to 8 million barrels per day by 2027. That would nearly double the current output of around 4.5 million barrels a day. The administration believes that it will gain huge investment to achieve this goal.

 

Baghdad believes that a large increase foreign money will help finance this effort but that’s unlikely to happen. In July Malaysia’s Petronas said it wanted out of the Gharraf field in Dhi Qar. It has had to deal with everything from local sheikhs demanding payoffs to the government not paying it. In 2021 ExxonMobile asked to leave but was rejected by the Oil Ministry. In 2018 Shell withdrew from the oil sector. Iraq has been a major disappointment for energy firms. The industry was far more devastated than anyone knew from the aftermath of the Gulf War and U.N. sanctions. Baghdad has always under delivered on everything from building the necessary infrastructure to providing visas for workers. That doesn’t mean that individual projects like building a new pipeline or something else won’t get interest but to think that international investors will flock to Iraq as the new strategy claims seems unbelievable. Those are the major reasons why the country has never met any of its production targets on time.

 

Last the World Bank has warned about Iraq’s schemes. The Bank said that Baghdad’s continued focus upon oil led development will always make the country vulnerable to fluctuations in the industry. The Bank for instance predicts that Iraq’s GDP will decrease this year because it is going to cut production due to new OPEC+ quotas. The country has consistently ignored these reports because every government since the 1930s has relied upon petroleum to fuel growth and none has ever had the vision to think differently. PM Sudani is just the latest to fall into this trap.

 

SOURCES

 

Bas News, “Iraq Parliament Backs More Oil Production Plans,” 8/26/23

 

Dourian, Kate, “Iraq crude oil production up in July as KRG oil trickles back online,” Iraq Oil Report, 8/21/23