Iraqi Oil Ministry Sets 2014-15 Targets for Crude and Gas Output

The Iraqi Oil Ministry is targeting a near doubling in the county’s crude production by 2014 to 4.5 million b/d, as it hopes to see the start of all the technical service contracts signed with IOCs last year and early this year. The TSCs are in total targeting Iraqi output capacity of 12 million b/d within seven years, with the Oil Ministry now specifying (in a document on its Web site) that by late 2014 its overall production capacity should have already almost doubled from today’s 2.4 million b/d. Meanwhile, Hazim Sultan, a former director-general at the Iraqi Oil Ministry, was quoted as telling Reuters that Iraqi associated gas output should see a fivefold increase within five years as oil production is ramped up, putting the likely Iraqi associated gas production in 2014-15 at 8-10 bcf/d. He expected domestic consumption to double from today’s almost 2 bcf/d–which is currently constrained by a lack of Iraqi spare production capacity–while expecting gas reinjection in its oilfields not to use more than 4 bcf/d, leaving some 2-4 bcf/d for exports at that time. The development of gathering, processing, and transport infrastructure for the associated gas facilities is, however, likely to cost about US$13 billion, according to Sultan, who now advises the prolific southern Basra governorate on oil issues.

Meanwhile, Shell (45%) and Petronas (30%) are preparing the award of tenders for the development of first production capacity at their Majnoon oilfield in southern Iraq, with chief financial officer Simon Henry tellingUpstreamthat “we have some good bids in” and expressing confidence that the mandated 175,000-b/d production capacity would be achieved by 2012.

Significance: Iraqi plans to develop its oil and gas are likely to lead to an overheating, given the vast size of the dozen or so oil mega-projects about to be launched with a near-identical time schedule. Trying to develop the gas is likely to further exacerbate that situation, while it is also very hard today to say how much will be used for reinjection, power production, and how much will be available exports. IOCs are only now starting to carry out early work on their reservoirs, and domestic power demand will grow exponentially as the power sector is repaired and wider economic growth is enabled. Iraq is also not finding it entirely straightforward to agree on domestic gas prices to be paid to producers, as Shell’s South Gas Project negotiations have shown.

2 Responses to Iraqi Oil Ministry Sets 2014-15 Targets for Crude and Gas Output

  1. […] Iraqi Oil Ministry Sets 2014-15 Targets for Crude and Gas Output … […]

  2. […] Iraqi Oil Ministry Sets 2014-15 Targets f&#959r Crude &#1072&#1495&#1281 Gas Output | Iraq Business … […]

Trackbacks/Pingbacks

  1. Market Fragmentation May Get Review After Stock Drop (Update2) | wwwyahoo_yahoomail_video_women - May 8, 2010

    […] Iraqi Oil Ministry Sets 2014-15 Targets for Crude and Gas Output … […]

  2. Penn West Announces Its Results for the Third Quarter Ended September 30, 2009 - May 9, 2010

    […] Iraqi Oil Ministry Sets 2014-15 Targets f&#959r Crude &#1072&#1495&#1281 Gas Output | Iraq Business … […]