It is one of the better problems a rebuilding country can have: Iraq is attracting too much oil investment.
The problem is that the infrastructure does not exist to export most of the extra oil produced. However, this is going to change as early as next year, perhaps increasing exports by one million barrels of oil per day, an increase of almost 40%. This will be a massive boost to Iraq, which gets around 95% of its revenue from oil.
In an interview with the Wall Street Journal, prime minister Nouri al-Maliki explained that the biggest hold up to exports is infrastructure. “That’s why we are about to construct a pipeline through Syria that pumps 2.6 million barrels per day. We also have the construction of four [floating] platforms for oil export.” The four platforms will export a total of 3.6 million bpd.
One of these platforms is due to become operational in September 2011, exporting 900,000 bpd. Add on the expected new Kurdistan exports of 150,000 bpd to 200,000 bpd and we’re looking at more than one million extra barrels, taking the total from 2.6m bpd today up to around 3.6m bpd. This will vastly overshoot the 2011 target of 2.25m bpd set earlier this year.
The cash generated will be used to finance further projects.
(Source: Wall Street Journal)