Iraq oil output to be squeezed until 2028
New estimates show Iraq’s oil production would be squeezed for the next decade as a result of what analysts see as a lack of adequate operational infrastructure.
A report by US consultancy IHS Markit as reported by media showed that Iraq would be able to marginally increase its production from the current 4.5 million barrels per day (m/bpd) to 5 m/bpd by 2028.
The country – which is the second largest producer of the Organization of the Oil Exporting Countries (OPEC) after Saudi Arabia and the fourth biggest in the world– would not be able to push up its oil output to 6 m/bpd before 2036, the report added.
“There is a lot of investment in getting wells out of the ground. And there’s a lot of investment in exporting that oil. But the connections between the oil fields and the storage farms in the south and the export points have been what has really led to the bottlenecks in Iraq,” said IHS analyst Christopher Elsner in an interview with Arab News.
Other impediments were the absence of electricity to run some oil fields, as well as the lack of pipelines, pumping stations and storage space — all of which have constrained capacity.
“Coordinating the purchase of various components such that you can progress without delay … has been another major issue,” said Elsner.
The state-run company responsible for oil projects in mid-stream had “a spotty execution track record,” he added. There was legal uncertainty around contracts, security risks, and water and electricity services were unreliable.
The oil-rich Basra province was rocked by renewed violence earlier this month as political protests regain momentum, threatening oil facilities. Thousands of Iraqis have been taking to the streets daily over the past week, torching government buildings and political party offices.
The demonstrations have added to oil supply concerns, according to various media reports.
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