Thursday, September 8, 2011

Iraq targets to reach 3 million barrels

Iraqi oil production could reach 3 million barrels a day (b/d) by the end of the year, but export-capacity constraints may shut in output, according to deputy oil minister Ahmed al-Shamma.

The country is looking to increase oil production and has attracted investment from a number of international oil companies developing 11 megaprojects awarded under two 2009 licensing rounds. The forecast output rise to 3 million b/d compares with average exports of 2.2 million b/d during the first seven months of 2011, according to oil ministry data. 

Iraq's petroleum production and consumption

Export bottleneck

We can hit the production target, but the bottleneck is export capacity,; Al-Shamma told the Iraq Mining conference on Wednesday. ;We are working on pipelines and SPMs (single point moorings). We have a promise to secure two SPMs by the end of the year. If we get them, we;ll have no problems producing 3 million b/d.; SPMs are needed to transfer crude onto oil tankers. 

Increased output is expected from a number of oilfields including: Rumalia (up to 1.3 million b/d from 1.06 million b/d); Zubair (to 270,000 b/d from 150,000 b/d); and West Qurna-1 (to 347,000 b/d from 230,000 b/d); which together will add nearly 500,000 b/d.

A law unto itself

Investment in Iraqi oil and gas fields comes despite the absence of long-debated national hydrocarbons law. The Iraqi cabinet approved the latest draft last month, but the semi-autonomous northern Kurdish region has called for parliament to reject it because it contradicts the constitution.

The debate about the hydrocarbon law will take time,; deputy prime minister Rowsch Shaways told the same conference. ;Parliament will discuss and debate this draft law and make the necessary changes. And parliament has its own views on the law. Then it will be up to the government of Iraq to make the changes.;

The oil ministry is at loggerheads with the Kurdistan Regional Government (KRG) over several issues including payments; revenue sharing; where the oil-rich Kirkuk province lies; and the central government's refusal to recognise oil contracts signed by the KRG..

In reference to the Iraqi government recognising KRG oil contracts, Shaways said: ;There will be solutions for all these pending problems. Otherwise the whole country will be in serious trouble.;

The first draft of the hydrocarbon law was circulated in early 2007, but there has been little progress since then. Consequently, all oil deals signed with international oil companies have been without explicit parliamentary approval. 

Results of oil field bidding rounds

The oil ministry has pre-qualified 46 companies to bid for 12 blocks under the country;s fourth licensing round. Five of the blocks are prospective for oil, while seven are believed to hold significant gas reserves, which the government sees as  The deadline for bids is January 2012.

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