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Established in 2006 as a Community of Reality

Welcome to the Neno's Place!

Neno's Place Established in 2006 as a Community of Reality


Neno

I can be reached by phone or text 8am-7pm cst 972-768-9772 or, once joining the board I can be reached by a (PM) Private Message.

Established in 2006 as a Community of Reality

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Established in 2006 as a Community of Reality

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    It will reach its peak in 2027 and then decline.. Iraq will never achieve its oil production target.

    Rocky
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    It will reach its peak in 2027 and then decline.. Iraq will never achieve its oil production target. Empty It will reach its peak in 2027 and then decline.. Iraq will never achieve its oil production target.

    Post by Rocky Tue 28 Mar 2023, 4:25 am

    It will reach its peak in 2027 and then decline.. Iraq will never achieve its oil production target.

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    Baghdad today - follow-up
    A press report questioned the possibility of Iraq achieving its goal, which includes raising oil production to more than 7 million barrels until 2027, which is the goal that was set by the country’s oil administration, but it “will never be achieved,” according to specialists, who saw that production would reach It peaked at 6 million barrels per day before returning to decline.
    Analysts believe that Iraq's oil production will reach its peak after growing by about 25% over the next five years, which is less than the goals of 2027 and ends a long-term ambition to compete with the production of Saudi Arabia, the largest producer in the Organization of the Petroleum Exporting Countries, OPEC, according to the report.
    The report indicated that the political rivalry missed the opportunity for Iraq to invest in increasing production more quickly. And as the transition to renewable energy accelerates, this means that Baghdad may not be able to tap hundreds of billions of barrels, even with the new oil minister's efforts to attract investment.
    Since 2016, Iraq's production has remained at around 4.5 million barrels per day. Before then, production capacity had grown rapidly, as the government opened up the sector in 2009 and international oil companies developed the country's largest oil fields.
    Growth slowed, in part due to Iraq's agreement to set a production ceiling under the supply policy agreed upon between OPEC and its allies within the OPEC+ alliance.
    Oil Ministry spokesman Assem Jihad confirmed to Reuters that Oil Minister Hayan Abdul Ghani, who took office last October, intends to modernize Iraq's oil production strategies to meet domestic needs while complying with the OPEC+ agreement.
    However, he said, "It is too early for the new government to talk about seeking to achieve any substantial increases in Iraqi oil production away from the OPEC + agreement."
    Under the agreement, Iraq's production target is 4.43 million barrels per day until last December. As a result, Iraq shifted its focus to the refining and gas sectors and cut capital spending in the oil sector, according to analysts at FGE Consulting and Rystad Energy.
    With regard to the oil sector, the country has repeatedly postponed the goal of reaching energy ranging between 7 and 8 million barrels per day, from five million barrels per day. The previous government said last year that it hoped to reach higher levels by 2027.
    Some consulting firms in the energy sector predicted that Iraq may never reach it.
    "Production capacity will reach its peak and will reach 6.3 million barrels per day by 2028, before it declines," said Iman Nasseri, managing director for the Middle East at FGE Consulting.
    He pointed out that the political, security and investment environment contributed to preventing Iraq from pushing production to a higher level than that. Nasseri believes that "the current goal of Iraq seems difficult, if not impossible."

    Rystad Energy expects production to be limited to 5.5 million bpd by 2027 as a result of growth constraints in midstream businesses and because projects deemed critical to boosting production are on hold.
    Two decades after the start of the war, the current goals and even lower expectations are far from Iraq's goal after the war to raise production capacity to 12 million barrels per day.
    Analysts said ambition declined in 2012 after international oil companies operating in Iraq negotiated lower production targets for their fields due to lower recovery factors and higher natural decline rates, as well as because the country was not investing enough in infrastructure.
    The major oil companies were also hoping that Baghdad would improve the terms of the technical service contracts. But this did not happen and companies including Exxon Mobil and Royal Dutch Shell left.
    Analysts and informed sources in the sector say that “the problems are on the surface of the earth and not in its interior, which contains huge undiscovered energy, and also includes frequent changes in government and political and bureaucratic disputes.”
    Successive governments failed to sign the fifth licensing round in Iraq in 2018. At the end of last February, six agreements were signed out of 11 oil and gas concession areas, marking long-awaited reforms to operating conditions in the country.
    The international oil companies were not the beneficiaries, but rather the Emirati Crescent Petroleum Company, as well as two Chinese companies.
    A source close to the Iraqi energy sector, who did not reveal his name because he was not authorized to speak to the press, told Reuters that "the contracts awarded pay fees in advance and link the revenues to oil prices."
    He added, "Abdul-Ghani's decision to sign the deals four months after his appointment may show a new determination from the government to conclude deals that are more attractive to international energy companies."
    But there are still other problems. A major seawater treatment project, which was needed to boost production in the southern oil fields through water injection, has been stalled for more than a decade due to disputes over terms.
    French oil major Total Energies is the latest to implement the project as part of a $27 billion deal to build four oil, gas and renewable energy projects over 25 years.

    The company's chief executive, Patrick Pouyanne, said this month that "contractual differences have not been resolved." "Iraq is not the easiest place to invest in light of all these risks," he added.

    According to Rystad data and Reuters Research, the water project will boost production in the five Iraqi fields by two million barrels per day from the growth of 2.4 million barrels per day needed to achieve Iraq's goals for 2027.

    “Completion before 2027 is unlikely even with a renewal,” said Aditya Saraswat, vice president of upstream research firm Rystad in the Middle East. This month, Abdul Ghani renewed seven investment opportunities in the refining sector.

    Saraswat explained that the new oil minister, even if he was able to find companies interested in these projects, the refining capabilities in Iraq only allow to increase production by 500 thousand barrels per day of crude, and that will take time.

    Meanwhile, data from the Iraqi Oil Marketing Company (SOMO) showed that export capacity from southern Iraq stopped at about 3.2 and 3.3 million barrels per day last year, after infrastructure development in the ports of the region overlooking the Arabian Gulf was disrupted.
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