Iraq’s oil production could rise to 4.4 million barrels per day (bpd) by 2015, according to a report by Bank of America Merrill Lynch on Friday.
Reuters reports that the revision from 3.8 million bpd forecast a year earlier had been prompted by “higher reserve estimates” released by the government, the bank’s commodities research team said in a note.
The Iraqi government raised its proven oil reserves figure by a quarter in October to 143 billion barrels, placing it third in BP‘s list of global reserves holders.
The research group added that strong emerging market demand growth coupled with falling non-OPEC output would at least partly offset 1.9 million bpd increase in Iraqi output in the run-up to 2015, reiterating that “crude oil prices will have to rise over the coming years.”
Iraqi production rose to 2.6 million bpd in December for the first time in 20 years, but remained below the 3 million bpd it produced in the late 1980s, prior to its invasion of Kuwait.
The bank said it remained “sceptical” that government plans to boost output exponentially by 2020 could be achieved, noting that security problems and infrastructure issues were likely to continue to limit production.
The Iraqi government expects output to rise to 12 million bpd over the next six or seven years according to an announcement by Iraq’s new Oil Minister Abdul Kareem Luaibi [Elaibi] in December.
The bank’s research group broadly forecast commodity prices to move higher in 2011 on strong emerging market growth, and oil balances to remain tight in 2011.
Iraqi economy could double every six years if production reached 6.7 million bpd in 2025, absorbing “some” of the increased output, the group said, adding Iraq might inevitably rejoin OPEC’s quota system once flows reached 4 million bpd.