The International Energy Agency (IEA) says that they will not be able to produce their target of 12 million barrels of oil per day by 2017. They say it could take an extra 20 years to produce half of the amount. It is predicted that their oil production will overtake Iran’s production by 2015. Iraq has awarded licenses for the development of 11 major oilfields. Unless the targets are met and the investment of approximately $150 billion takes place, the desired production amount will not be reached in the next seven years. IEA stresses the mammoth nature of the task, saying that the “sheer scale of the required construction of infrastructure, coupled with political uncertainties, suggests that the expansion of capacity will be much slower”.
Due to the size of this operation, the IEA believe that this may progress a lot slower. Other things such as basic infrastructure, including road, bridges, airports and water supply, need to be repaired and expanded. Because Iraq’s existing export routes are fully utilized, a major expansion of the shipping ports will be needed. So the IEA projects Iraqi output of 6.5 million barrels of oil per day in the 2030s, compared to the 2.5 million barrels currently produced per day. A lower oil production in Iraq should help Opec avoid any conflict with its members over output allocation. Analysts warn that a dispute could threaten the cartel’s unity. This could be a threat to the cartel’s ability to manage the global oil prices.
-Kelsey Tomlinson
http://www.ft.com/cms/s/0/def69f28-e76c-11df-b5b4-00144feab49a.html
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