Minister says $1b project to raise export capacity to 4.5m bpd by 2012 is on track
Iraq expects crude output to increase by about 600,000 barrels per day (bpd) through 2011, based on initial plans from global firms for oilfields that were auctioned off last year, a senior oil official said yesterday.
Deputy Oil Minister Abdul Kareem Luaibi also said Iraq is moving ahead with a more than $1 billion (Dh3.67 billion) project to raise its export capacity to 4.5 million bpd by the end of 2011 through the construction of new offshore terminals and pipelines.
"The increase we expect, which is 10 per cent for the oilfields from the first auction and the initial production for the oilfields from the second auction, is a total of about 600,000 barrels per day," Luaibi told Reuters in an interview.
"That will be achieved over this year and the next year."
The Opec member has signed a clutch of deals with global oil firms that could boost its output capacity to 12 million bpd in six to seven years' time from 2.5 million bpd now. That would rival top producer Saudi Arabia's capacity, and is viewed by most industry experts as a highly ambitious target.
Nevertheless, Iraq hopes the deals will generate the billions of dollars desperately needed to rebuild the economy. Luaibi said Iraq needs more than $10 billion to rebuild and expand its export and storage facilities beyond the initial $1 billion investment, after years of war, insurgency and sanctions left its oil infrastructure in a dilapidated state.
The Oil Ministry aims to invite foreign firms to help with the expansion as it will be short of the needed funds.
"We had 58 storage tanks in the Fao [peninsula] that were totally destroyed during the Iraq-Iran war and we had dozens of tanks and pumps that were totally destroyed," he said.
"The rebuilding and rehabilitation process needs time and more importantly cash and we have a limited budget," he added. "That's why... we would seek foreign investment."
To meet the anticipated jump in crude production, Iraq has invited interest from contractors for services to enhance its export facilities and pipelines in the southern oil hub city of Basra.
The $1-billion project — partially funded by a Japanese government loan — includes installing three offshore pipelines plus four single-point moorings. This would raise Iraq's export capacity from Basra to 4.5 million bpd by the end of next year from 1.9 million bpd now, Luaibi said.
( Reuters )