Comments: Iraq On The Rise
- John Donnelly (JPT Editor)
- Document ID
- Society of Petroleum Engineers
- Journal of Petroleum Technology
- Publication Date
- April 2011
- Document Type
- Journal Paper
- 16 - 16
- 2011. Society of Petroleum Engineers
- 0 in the last 30 days
- 82 since 2007
- Show more detail
- View rights & permissions
|SPE Member Price:||Free|
|SPE Non-Member Price:||USD 4.00|
Despite political and infrastructure hurdles, oil production from Iraq is on the rise. Output has reached 2.6 million b/d, the highest total since the US invasion in 2003.
The increase in production is coming from new projects begun by major operators over the past two years. The government has held three bidding rounds in the past two years, auctioning off more than a dozen oil and gas fields. Now it is contemplating another round later this year. Blocks in the southern, northern, and western parts of the country will be offered. The south is by far the largest producing region.
Total oil production now stands at approximately 2.6 million b/d and three fields currently under development could add another 500,000 b/d to output by the end of this year. Production began rising last year, as companies that won fields in a 2009 auction began drilling, primarily in the southern part of the country. Companies are optimistic about increasing output this year. BP already has increased production at the Rumaila field from 1.06 million b/d to 1.28 million b/d, Eni has increased output at the Aubair field from 148,000 b/d to 270,000 b/d, and ExxonMobil plans to boost output at the West Qurna 1 field 50,000 b/d to 280,000 b/d.
At the recent Iraq Oil & Gas Summit in Houston, former Iraqi Deputy Minister of Oil Abdul Jabbar Al-Waggaa said activity by operators and service companies in the country was growing despite legal questions about some of the contracts signed. He advocates the creation of an Iraqi national oil company that would renegotiate the upstream contracts that the government has signed with operators. Iraq has the potential to be producing 7 to 8 million b/d in a decade, he said, although the country’s stated goal is to increase production to 12 million b/d by 2017.
Most estimates are less optimistic. A report by analysts at Bank of America Merrill Lynch predicts that production will hit 4.4 million b/d by 2015. The Center for Global Energy Studies forecasts output of 4 million b/d by 2018. And the International Energy Agency sees 4.8 million b/d by 2020. These reports note the huge constraints on the current infrastructure system of pipelines, storage, and export facilities and political uncertainty rather than the potential of Iraq’s oil fields. Regardless of the rate of increase, the key issue of how other OPEC members will react to new production entering the market must be addressed, Mussab Al-Dujayli, a former official with Iraq’s oil ministry, told the Houston gathering.
Most of the oil increase appears to be heading for Asia, especially Japan, China, and India. Asia is expected to receive just less than 1.1 million b/d of exports this year, almost half of Iraq’s crude exports of 2.4 million b/d. Although oil has been the focus of development so far, Heritage Oil announced a major gas discovery in the Kurdistan region in January. The company estimates reserves of between 6.8 and 9.1 Tcf. More drilling will take place later this year.
|File Size||65 KB||Number of Pages||1|