Challenges facing Iraq's plan to produce 8 million barrels of oil in 2027

[size=52]Challenges facing Iraq's plan to produce 8 million barrels of oil in 2027[/size]

[size=45]Translated by Hamid Ahmed[/size]
[size=45]An American report confirmed that Iraq faces challenges in implementing its plan to reach the production of eight million barrels of oil per day by 2027, stressing the need for more investment to deal with the expected increase in associated gas.[/size]
[size=45]A report by the American (Platts) agency, translated by (Al-Mada), stated that "Iraq, which is the second largest oil producer in OPEC, still expresses high ambitions to double its oil production capacity to reach 8 million barrels per day by the year 2027."[/size]
[size=45]The report added, "These ambitions come despite the uncertain future facing fossil fuels and the country's chronic political turmoil."[/size]
[size=45]He pointed out that "a country that suffers from financial distress will require it, in order to achieve this goal, to attract unprecedented rates of foreign investment."[/size]
[size=45]The report noted, "This comes at a time when many international oil companies, which are already uncomfortable with the financial conditions offered by Iraq over the years, are seeking to avoid risking their financial investments."[/size]
[size=45]He explained, "In order to achieve this goal and ambition, Iraq will require it to allocate funds not only to enhance drilling work, but to expand the size of surface production facilities and export infrastructure, as well as significantly reduce the quantities of burning associated gas, which made Iraq one of the most polluted oil-producing countries."[/size]
[size=45]Hussein Chalabi, a consultant in the oil field residing in London, does not believe that "the goal of reaching a production ceiling of 8 million barrels per day is technically realistic or achievable."[/size]
[size=45]The report stated, "The National Energy Strategic Plan adopted by Iraq in 2013, according to which Iraq's production was now supposed to reach 9 million barrels per day."[/size]
[size=45]He added, "Years of wars with ISIS worked to destroy the country's economy and destabilize its political stability, then the Corona virus epidemic came to crush oil prices, which prompted the OPEC countries and its allies to introduce cuts in their oil production in 2020 to achieve price stability." The report emphasized that "the Iraqi production of crude oil during the month of October, including what was produced from the fields of the Kurdistan region, amounted to 4.17 million barrels per day." And it is likely, "Iraq's production capacity of crude oil by 2027 will reach 4.72 million barrels per day, and it may eventually rise to 5.74 million barrels per day by 2040." And the report quoted a section of Iraqi analysts as saying, “They believe that the country may be able to achieve a production rate of 6 million barrels per day by 2027, but this will depend largely on the prevailing policies, on OPEC production quotas, and other potential restrictions.”[/size]
[size=45]The report continues, "The Ministry of Oil mainly depends on technical service contracts with foreign companies such as ExxonMobil, BP and Shell."[/size]
[size=45]In contrast, the report stated, “International oil companies often prefer production partnership contracts, which allows them to calculate reserves according to their budgets to enhance their investment assessments.” And he continued, “Iraq witnessed Shell leaving its investment in the Majnoon field, while the company raised ExxonMobil arbitrated to sell its stake in the West Qurna-1 field, and BP transferred its operations in the Rumaila field to a secondary company in accordance with its energy strategy. The report warned, "Lukoil also sought to empty its share in the West Qurna-2 field, before withdrawing its request in July."[/size]
[size=45]Regardless of the terms of the financial contracts, the report says, "Many Western oil companies are now facing periodic pressure from shareholders to settle their accounts."[/size]
[size=45]The report goes back to the advisor, Chalabi, and quotes him as saying that "international oil companies are less attracted to new investments in their oil sector, and instead they are trying to commit themselves to sustainable development goals in order to redraw their investments."[/size]
[size=45]On the other hand, the report talks about “a great environmental concern related to gas flaring, and according to the World Bank, Iraq burned in the year 2020 approximately 17.37 billion cubic meters of associated gas, which is the highest in the world after Russia.”[/size]
[size=45]He stated, "Iraq plans to spend $3 billion annually to get rid of gas flaring by 2025."[/size]
[size=45]And the report added, "The quest to increase crude oil production to 8 million barrels per day will increase the rates of associated gas emissions."[/size]
[size=45]And the report went on, "This requires more investment in gas collection and processing plants, which in turn will consume from additional oil imports."[/size]
[size=45]About Platts Agency[/size]
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