Iraq unveils plan to triple oil output
Iraq has announced an ambitious 10-year plan to triple oil production to 6 million barrels per day by 2015, saying it will need $20 billion in foreign investment to boost output.
NK Al-Bayati, director-general of Iraq‘s Oil Ministry, told the Asia Oil and Gas conference: “We have a 10-year broad plan. Our expansion philosophy is to try to replace depleted production volume and add to our national reserves.”
Al-Bayati said the increase in output from the current level of 1.8 million barrels per day (bpd) would be done in two phases.
Under the first phase, oil production would increase to 3.5 million bpd to 4 million bpd in 2010, and 5.5 million bpd to 6 million bpd by 2015, he said in an address to about 1200 delegates.
Al-Bayati said Iraq was optimistic it would be able to achieve the target despite the ongoing violence in which oil pipelines were also targets.
“We are very optimistic. We have to be. We have no alternative,” he said. “God willing the money will come.”
Al-Bayati said Iraq would try to borrow from the world community and invite international oil companies to modernise its oil industry.
“We hope the foreign oil companies will help us achieve our goals in these difficult times,” he said.
World’s second-largest reserves
Iraq has the world’s second-largest proven reserves at about 115 billion barrels, but production has been sharply reduced by war and more than a decade of UN sanctions.
The battered oil sector also is being targeted by fighters opposed to US-led forces.
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“I think any oil and gas players cannot ignore Iraq“ |
Al-Bayati said that to boost output and woo international investors and oil companies, Iraq needed to ensure security, put in place a legal framework and formulate national oil policy.
“Hopefully this (when in place) will help regain international confidence in Iraq. Iraq will become a new hot spot in the Middle East for oil production,” he said.
Al-Bayati said some international oil companies such as Malaysia‘s Petronas were exploring the prospect of drilling for oil in Iraq.
“Oil companies have a huge role to play. We have a long association with Petronas. We discussed with them cooperating on a block in the western desert. We discussed with them the development of one of the giant fields in the Basra region in the south,” he said.
Keen investors
Petronas president Hassan Marican said on Monday that the national oil firm was keen to invest in the upstream oil and gas business in Iraq.
“I think any oil and gas players cannot ignore Iraq,” he said, adding that discussions were ongoing.
But not all other international oil companies are expected to rush to Iraq.
Richi Kruger, vice-president Asia-Pacific/Middle East for ExxonMobil Production, said the major factor for foreign oil companies would be whether the confidence and safety of workers could be ensured.
“On the political side, we have to have confidence in the sanctity of the contract,” he said.