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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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    Iraq's ambition to double oil production is declining... and an expert explains the reasons

    Rocky
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    Iraq's ambition to double oil production is declining... and an expert explains the reasons Empty Iraq's ambition to double oil production is declining... and an expert explains the reasons

    Post by Rocky Fri 05 Jan 2024, 4:17 am

    Iraq's ambition to double oil production is declining... and an expert explains the reasons
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    Baghdad Today - Baghdad
    Economist Omar Al-Halbousi confirmed today, Friday (January 5, 2024), that the Iraqi government’s ambition and plan to increase oil production to reach 8 million barrels by 2027 has declined due to the internal and external obstacles facing these plans.
    Al-Halbousi said in a press statement followed by “Baghdad Today” that “the ambitions announced by the Ministry of Oil were to reach 8 million barrels by 2027 compared to the current production of 4 million barrels, given that the large increase it wanted required important and necessary tools to increase Oil production.
    He stated, “Among those required tools is an increase in the number of refining units, as well as advanced infrastructure capable of achieving this amount of increase in light of the cessation of some strategic projects related to oil extraction and refining, the work of which has not been completed, and the oil infrastructure is not It still lacks the advanced equipment and technologies necessary to increase production, in addition to building pipelines and expanding ports.”
    The economic expert pointed out, “There are obstacles facing this increase, some of them internal and others external. As for the internal obstacles, they are represented by the weakness of the Iraqi oil infrastructure and its lack of equipment and technology necessary to achieve the increase in production, in addition to the necessity of expanding the oil transport pipeline networks necessary to achieve the increase.”
    Al-Halbousi continues by saying: “In addition to the absence of reforms in oil policy, which constitute an obstacle to increasing oil production, the government’s conflicts with investors in the field of oil are large and most of them have not been resolved, and financial and administrative corruption also constitutes an obstacle to increasing oil production and developing the Iraqi oil industry.” .
    He noted that there are other obstacles to the Iraqi ambition, represented by external obstacles, the most prominent of which is the (OPEC+) agreement, which reduced oil production and the members, including Iraq, committed to it for the purpose of achieving an increase in prices, and that the Ministry of Oil’s attempt to submit a request for the purpose of excluding Iraq from this reduction will not work. "Succeeds."
    In this regard, he also pointed to the outstanding problem between Baghdad, the Kurdistan region, and Turkey, which led to the cessation of the export of Iraqi oil via the Turkish Ceyhan line, which is one of the obstacles that have not been resolved until the moment, and even if work on it resumes, it remains limited because it depends on infrastructure. Iraqi infrastructure is still far from keeping pace with developments in the oil industry.
    The economic expert confirmed that one of the most important obstacles facing increasing Iraqi oil production is the challenge of water shortage, as Iraq suffers from a severe water shortage, especially since water is widely used in injection into oil fields to push crude oil up and maintain oil reservoir pressure, which is higher compared to External pressure helped the oil to flow from its reservoirs easily through the pipes to its collection sites.
    Al-Halbousi recalled the Iraqi seawater transport project that was announced in 2011, and is still suspended and has not been implemented. The French company Total Energy tried to revive the project in 2022 with the initial agreement with the Iraqi government, but it was also suspended amid the dispute over the Iraqi government’s share of the project.
    The economic expert pointed out that the oil companies operating in Iraq had previously promised to increase Iraq’s daily oil production to 7 million barrels, but they did not achieve this despite the passage of nearly 10 years since this announcement due to the withdrawal of some oil companies operating in Iraq, and this is still the case. Withdrawals are frequent, one company after another. Although Chinese companies have taken the place of the withdrawing companies, they have not achieved an increase yet, and their plans are still vague and unachievable in light of the failure to solve the obstacles facing increasing oil production.
    Oil production in Iraq faces great challenges. In conjunction with OPEC+ plans to reduce production to support market stability, a number of major oil companies announced their withdrawal from Baghdad, the most recent of which was the American company Exxon Mobil, which left the West Qurna 1 field a few days ago.
    Iraqi oil export revenues decreased in 2023 by 15.56%, losing about $17.98 billion on an annual basis, according to recent data collected by the specialized energy platform.
    Government data showed that Iraq's revenues from selling oil declined to $97.56 billion in 2023, compared to $115.54 billion in 2022, but it was higher than the budget estimates of only $80 billion.
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