Page 6 - MEOG Week 20 2022

MEOG POLICY & SECURITY MEOG

Iraq reduces 2027 oil capacity target

IRAQ IRAQI Oil Minister Ihsan Abdul Jabbar said this Carried out over 18 months by Booz&Co., the
week that the country was working to increase study set its low case at 6mn bpd by 2025, with
oil production capacity to 6mn barrels per day by the medium scenario hitting a plateau of 9mn
2027, a drop of 2mn bpd from the target spoken bpd by 2020 and the best case envisaging a highly
of last year. improbable 13mn bpd by 2017, which was seen
During an industry event in Bahrain, he then declining rapidly to around 10mn bpd by 2030.
said that current capacity sits at 4.8mn bpd, While civil unrest and geopolitical concerns
rather than the 5mn bpd often referenced, but have conspired to constrain the expansion,
noted that the latter figure would be reached by Baghdad has also not helped its own cause,
the end of the year. while the terms of the technical services con-
Given Iraq’s enormous upstream potential tracts (TSCs) – under which international firms
and low upstream production costs – estimated are developing the majority of the country’s larg-
at less than $2 per barrel, an increase of just over est oilfields – have proved to be a regular bone
1mn bpd in five years is modest; however, con- of contention. Even then, Iraq has so far been
servativism from the Ministry of Oil (MoO) is broadly hesitant to renegotiate terms, even as it
borne of experience that various geopolitical, dramatically revised downward production tar-
security, geological and infrastructure issues gets at the biggest fields.
pose significant barriers to rapid expansion. Despite these problems, the country has been
It is indicative of the impact of shortages in ramping up production in recent months in line
water supplies in particular that the 6mn bpd by with easing OPEC+ quotas. April output was
2027 figure is even less optimistic than the low reported at 4.405mn bpd, just shy of the 4.414mn
production planning scenario set out in the 2012 bpd quota for the month. The May target envis-
Integrated National Energy Strategy (INES). ages an increase of 50,000 bpd.™

P6 www. NEWSBASE .com Week 20 18•May•2022