Iraqi oil output will double in the next decade, not quadruple as in initial government targets, but the country could still test Saudi Arabia’s influence in OPEC, oil major Shell said on Monday.
In its energy scenarios to 2050, published for the first time since 2008, Shell said Iraq was a key uncertainty in the oil supply picture, with output likely to reach 5-6 million barrels per day over the next decade if reasonable stability and security are achieved, according to Reuters.
Iraq’s previous government had said partnerships with oil and gas companies including Shell could push output to as much as 10-12 million bpd.
“This would mean annual growth rates of 10-15 percent would have to be sustained for at least 10 years — a feat unseen in recent history,” Shell said.
Shell said that in the medium term, a balance must be struck between ramping-up production quickly for Iraq to generate income and avoiding over-supply so that OPEC can manage its spare capacity buffer adequately.
“Key to price volatility will be OPEC’s spare capacity levels, its adherence to agreed quotas to limit production during periods of weak demand and continued market perception of medium to longer-term supply-demand tightness”.