Since 2018-03-15 at 09:01 (Baghdad time)
Baghdad - Mawazine News
Iraq, OPEC's second largest oil producer, is facing obstacles in the next phase to increase its production capacity as the appetite of international oil companies to invest in the country's low-yielding sector declines.
After cutting production targets in 2013 and 2014, most foreign oil companies are adjusting production levels of their target fields further, and Iraqi and company sources say the discussions are proceeding at a slow pace.
Reuters estimates show that growth has been the hallmark of Iraq's oil production in the last 10 years, an increase of more than 2.5 million barrels per day to peak at 4.71 million bpd in late 2016.
Iraq owes much of this growth to increases by BP, Exxon Mobil, Lukoil, Eni, Total and Royal Dutch Shell, the companies that oversaw the redevelopment of its fields The US-led invasion in 2003.
But these companies have long complained that Baghdad's technical service contracts with foreign companies in the sector are too rigid and offer little return on investment.
Most companies have negotiated in the last five years to reduce their output target, which led Iraq to reduce its plan to increase production capacity from 12 million barrels per day to nine million barrels per day by 2018.
Now, this new level seems far-fetched as Iraq aims to increase its capacity to 7 million bpd by 2022.
"All companies except Petronas and Total are proposing to reduce their target production levels," Abdul Mahdi al-Amidi, director of contracts and licenses at the Iraqi Ministry of Oil, told Mawazine News.
"We accept in principle to reduce the level of production targeted to certain fields to lower rates, but all this is under discussion," he told reporters on the sidelines of a conference in Berlin last month.
Total, along with its partner PetroChina, has pledged to implement Phase III expansion of the Halafaya field, which is estimated at 4.1 billion barrels, with the aim of doubling its production to 400,000 barrels per day in 2019.
Petronas aims to reach the production level to 230 thousand barrels Daily in the Gharraf field you are running.
"Lukoil is the only one so far that has reached a preliminary agreement with the Oil Ministry on a reduced level of production target to reach the production level of West Qurna 2 target of 800 thousand barrels per day, down from 1.2 million barrels per day."
We have been discussing but we have not reached an agreement yet," he said.
He noted that "Iraq wants to achieve the target production level earlier than you want , " Lukoil ", but declined to specify the time frame currently under discussion.
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