Iraq’s oil capacity goal flexible, revenue key

April 10, 2011 - 0:0

Iraq’s theoretical oil capacity goal of roughly 12 million barrels per day (bpd) might not be reached as it focuses on maximizing revenue, not output, and reassesses world needs, Iraq’s deputy prime minister for energy said.

Hussain al-Shahristani, addressing a round table in Paris, also said a partial agreement with the Kurdistan Regional Government (KRG), where exports have reached 115,000 bpd, was a “positive step” that should lead to further progress.
Overall output was 2.7 million bpd, of which 2.2 million bpd was being exported, Shahristani said in a transcript of the discussion on Thursday in Paris.
Shahristani, a former oil minister, oversaw a series of bid rounds that led to contracts with foreign oil companies that could make Iraq’s production capacity rival that of world leader Saudi Arabia.
Many have questioned Iraq could achieve that in the foreseeable future.
“Based on these contracts, the production plateau is about 11.5 million barrels per day in six to seven years,” Shahristani said in a transcript of the round table talks.
Technically, the international oil companies, some of which were ahead of schedule, could deliver on time, but that might not be appropriate.
“When I talk about production capacity of 11-12 million barrels per day -- which is on par with Saudi Arabia -- that doesn’t mean Iraq will necessarily produce at that level. Our strategy is to maximize our revenue and not to maximize our production,” he said.
“We have to watch carefully the world economic recovery, the developments in the political upheaval in the Middle East -- we cannot ignore the Fukushima (nuclear) disaster in Japan and so on,” he said further. “We need more time to see how the demand is going to increase.”
Certainly, there were no plans to increase oil capacity any further.
“We think there is room for Iraqi production up to 12 million barrels per day over the coming 20 years and there is no need to spend more money to create additional capacity,” Shahristani said.
(Source: Reuters)