Experts predict 10% rise
Baghdad the new morning:
Oil Minister Jabbar al-Luaibi said oil prices are nearing stability and that the refining capacity in the country is now about 670,000 barrels per day with local consumption reaching 1.2 million barrels per day, creating a gap in the balance with fuel imports, which cost Iraq more than two billion dollars a year.
To cope with the huge deficit between consumption and refining capacity, Iraq aims to raise oil production to 7.5 million barrels per day (bpd) by 2024, a move aimed at increasing the active development of new oil fields and renewing existing extraction capacities.
In April, the oil ministry worked to explore 11 new oil fields, after which six oilfields were awarded to international energy companies, with the remaining proposals receiving no interest from potential investors.
Despite Iraq's efforts to boost production, the conditions of previous decades, including low return on investment and stringent technical requirements, have led to a low rate of exploration.
The aim of the new contracts is to strengthen the link between the prevailing oil prices and reward them in addition to the introduction of the element of property rights and a time limit for companies, especially investment, to end the burning of gas in the oil fields that develop.
More than 90% of the country's revenues come from the Iraqi oil and gas industry, and the Iraqi government is seeking to increase foreign investment for national exploration projects from international oil companies through partnerships with institutions such as Royal Dutch Shell Bp Exxon Mobil Eni Lukoil and Total.
But the problem facing the Iraqi government is the lack of proof of international oil companies operating in Iraq, as Shell withdrew from exploration projects in the fields of Qurna and Majnun oil, in addition to the government also faces the problem of assumptions based on the current contracts as the contract requires that the current exploration companies And extraction at $ 1.15 per barrel extracted. Given the current market conditions, these conditions can not build investor expectations.
These problems will limit the government's plans to increase production with the knowledge that none of the major international oil companies did not make any bids during the recent auction of 11 new exploration sites.
Experts expect a 10 percent increase on Iraqi oil production of about 10 million barrels per day only if conditions are favorable but under difficult investor conditions and due to the loss of life of natural oil wells, the only remaining option is to stabilize production rates community.