Editorial: Challenges facing Iraq’s oil industry in 2012

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Editorial: Challenges facing Iraq’s oil industry in 2012
Dr. Ibrahim Bahr al-Ulum

Iraq faces a major challenge to today’s level of qualification systems, export, transport and storage to accommodate the expected increases in oil production. The coming months will be critical to the success of Iraq’s ruling to the implementation of plans to develop oil fields.

Although the indicators in 2011 in Iraq to increase oil production by encouraging the opening up Iraq to foreign companies. In the past nine months of this year, Iraq was able to supply the oil market, up more than their rates of 300 thousand barrels per day through the ports of North and South, and this is an indication of the activities of foreign companies and investments in rehabilitation and development of oil fields that Iraq had succeeded in signing with them in the licensing rounds, the first and the second was held in Baghdad in 2009.
This increase represents 18% of what was exported in 2010. The increase from the fields of Kurdistan (100 thousand barrels per day) and Ahdab in Wasit province, which is invested by the Chinese company (50 thousand barrels per day), while the remainder proceeds initial rehabilitation of the giant fields produced in the province of Basra Kalrmelh, Zubair, West Qurna 1, which involved coalitions oil companies Arobeh and Asian and American in its development.

Iraq expects to increase its production from the current 2.8 million barrels per day to rates of 3 million barrels per day at the end of this year, and this may be exceeded by the rates of production of Saddam Hussein’s invasion of Kuwait in 1990. It is hoped that Iraq can increase production for next year 2012 up to half a million barrels per day and up to rates of 4 million barrels per day at the end of 2013 and if it does, it will be Iraq has achieved a great accomplishment to exceed the highest rates of oil production as it was in 1979 before the start of Iraq war – Iran.

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This scenario would bring to Iraq, additional revenues of Iraq up to 50 billion for the next two years will contribute to bridge the budget deficit huge is the oil resources of more than 90% of them, as well as help Iraq to implement its development programs and improve services, especially in the field of electricity and this would encourage foreign companies to move with confidence fulfill its obligations in the largest increase in production and the other would put this scenario Iraq a key player in the oil market for the coming years.

But to achieve this scenario to get to the productive capacities in the range of four million barrels per day faces significant challenges and real today because of weak infrastructure systems, export, transport, storage and system water injection and a congestion, collectively a major obstacle to projects to increase production in the short period ahead.

Iraq plans to increase its energy export in the south to about 5 million barrels per day by 2015 through the construction of floating docks 4-5 in Gulf waters, the capacity of each of them about 900 barrels per day. Iraq and reliable completion of the construction of the first floating dock at the end of the year, becoming unable to export 2.6 million barrels per day at the end of this year with the construction of water pipes under the 48-inch Wang noted that the current capacity of the port of Basra does not exceed 4-5 million barrels per day.

As well as Iraq seeks expansion of oil reservoirs to accommodate the production of ten days, while the capacity of the current Alkhozanah in the south does not exceed 1.7 million barrels, which reduces the possibility of maneuvering in production. Iraq is trying to deal with Exxon Mobil, which involved Hinolndeh with Shell to develop the West Qurna -1 for the implementation of the construction of water injection system to support the pressure of oil reservoirs in the southern fields of the Gulf waters. The agreement is expected to lead to complete the first phase of the project to provide water injection by about 4 million barrels per day within two years and will be arriving by the project to expand the capacity of about 14 million barrels per day in later periods. It is not clear yet about the possibility of the company to continue to work after being picked up in recent days news for Exxon Mobil signed agreements with the Kurdistan region.

Although the projected increases in production will be mostly from the giant fields produced the three expected to reach its production to two million barrels per day, the end of this year, where the production of the Rumaila field about two-thirds of which will be urgently needed during the next two years to further drilling and reclamation of more than 400 wells in which which requires contracts with drilling companies quick to Anjazaha and provide the needs for technical Mnchaitha surface, which requires approvals are not delayed by the joint committees overseeing the fields.

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It is true that Iraq has succeeded in signing contracts to develop oil fields in the years 2009 – 2010, which is the largest in the history of global oil industry in terms of the volume of reserves and the time period and began encouraging signs in the increase in production this year is to stage the coming months, especially next year will be crucial to prove Iraq’s ability to avoid bottlenecks in infrastructure.
Oil companies will not enthusiastic about its plans to move production unless you find the rehabilitation plans of export and production systems for which the Iraq implemented in cooperation with foreign companies, a business is able to absorb increased production within the time plan realistic and clear. It is essential that Iraq does not lose the current momentum to the companies. Tlkae-Fi in the rehabilitation program of these systems will reflect negatively on the performance of companies which are controlled by the factor of time flexibility and the size of the proceeds.

And that the Iraqis today are looking forward to the experience of opening up to foreign companies to develop the oil sector after an absence of more than four decades of optimism Basha Any delay affects projects to increase production would hit Iraqis Basha of frustration. And that the international community is counting a lot on the success of the Iraq experience in the exploitation of oil wealth because it contributes to the stability of the global market for the foreseeable future and dispel concerns in front of the scarcity of energy supplies as a result of the turmoil prevailing in the region.

Then your in front of Mr. Maliki’s government employ all their energies and to benefit from the expertise and the possibilities of foreign companies working to secure the success of their plans for the rehabilitation of infrastructure and give priority in their programs for the coming months a manner that assures companies the possibility to proceed with programs to increase production within the time periods specified without Tlkae. That any setback affect the Iraqi experience in the oil sector will directly impact on the future of foreign investment is difficult to predict the implications of. And it becomes necessary that there be room operations involving the highest levels of the Iraqi government to follow up on things directly and has extraordinary powers to deal with things and to meet the requirements of the critical phase.

And proposes a special conference sponsored by al-Maliki and his deputy oil minister and the leaders of the oil sector, experts and the participation of Executives of oil companies working to review the plans rehabilitation systems export, production, and diagnosing problems to break bottlenecks and try to invest the capacity of foreign companies, technical, financial and administrative help Iraq to overcome the bottlenecks now. Indicate some unofficial reports that some companies would move to reduce production rates in large fields due to lack of export capacities to absorb.

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Access to the productive capacities up to 4 million barrels per day during the next two years he became a target of the oil industry of Iraq and we must abide by it and address all the problems that prevent Thakbak that especially in the field of export and compel companies operating in cooperation with private sector companies, especially Iraq to reach a common plans bear all parties responsibility for their implementation within a short period to come.

Valochehr next will test most of the Iraqi government in overcoming the existing bottlenecks in the system of the South and think seriously about making plans to rehabilitate the pipeline through Syria and begin a plan to build a pipeline a strategic road linking the south and north and be able to absorb production in the southern fields for export through Syria or Turkey to face any future prospects in the Gulf. We must remember that the regime of Saddam Hussein in 1987 was able to build a strategic pipeline to export crude oil through Saudi Arabia in a record period not exceeding 18 months, which is also useful in this context re-negotiating with Saudi Arabia in order to restore it.

Finally, the missed Iraq’s great opportunities in the past decades to develop the oil sector, you should not miss the opportunity again today, and it must make a special effort to overcome obstacles and problems, technical and logistics to get to the rates of productivity similar to what it was in Iraq before the Iran-Iraq war in the next two years That precious opportunity realism.

The Iraq succeeded in the investment opportunity, overcome obstacles to overcome the production of four million barrels per day in the end of 2013 opens the way for him to achieve an increase in production rates for more than 10 million barrels per day in 2020 and for Iraq to become one of the key players in the oil market and otherwise Iraq will have missed an opportunity the other is difficult to compensate seconds.

11/11/2011

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