By Stan Harbison, Vice President of Research and Analysis at energy consultants EPRINC.
The current efforts to dramatically increase Iraq’s oil production are huge in scale and revolutionary in forming a working partnership between Iraq’s own oil industry and the world’s largest oil companies. But more important at the present is the fact that they are working by any definition.
The genesis, the lobbying, the creative work and the current implementation of these projects is the work of often unrecognized Iraqi oil professionals who, for nearly all of their careers, have been denied the opportunity to continue their successful work from the 1970s. This is an Iraqi effort, in a constructive partnership with foreign companies.
Outside Iraq, observers remain sceptical, but on the ground, there is little time for scepticism. Events are moving quickly. The international companies leading the field developments are complying with demanding contractual requirements. A wide array of global private support and infrastructure companies from around the world have moved aggressively to secure work. The Iraqi government and oil ministry, while young and short on experience, are moving ahead in tackling tough and hugely expensive infrastructure projects.
Of course there are problems: landmines, failing infrastructure, worries about security, and substantial training requirements for Iraqi oil personnel. Importantly oil developments have not been the subject of political interference or criticism. But a new government will need to address the completion of already written oil-related legislation. Most critical is the need to enact a transparent and credible revenue-sharing law. An assurance that the benefits of increasing oil revenue will be fairly distributed across the country would support both the oil projects and Iraq’s political evolution.
Stan Harbison has been an oil and gas analyst since 1982. He has worked as a research investment analyst for a prominent US investment firm for BP, Louis Dreyfus Commodities Energy Trading and for the US. Department of Energy. He has met regularly with top managers in the world’s largest oil companies, key officials in more than ten of the world’s largest National Oil Companies and has attended many OPEC meetings. In the past year, he has devoted all of his time on Iraq’s oil development with EPRINC, (www.eprinc.org), an independent oil analysis firm in Washington DC, which provides analysis on critical emerging issues in the oil industry. Its work is read by the public, the US Congress and key US government officials.