The energy sector in Iraq is predicted to see investment of a minimum of US$50 billion over the next five years amidst a gradually improving security situation. This was one of the key findings of ‘Iraq – An Energy Overview 2012’, a comprehensive country report developed by EIC Consult, the market research and consultancy arm of the Energy Industries Council (EIC).
The EIC Consult report found that, despite continued concerns over security, political instability, and the lack of a settled investment environment, the proposed infrastructure overhaul and ambitious plans to increase oil & gas production present huge and long-term opportunities for service providers at every stage of the supply chain.
The report stresses that Iraq remains the largest and most underdeveloped oil nation in the world today, with fewer than ten wells drilled annually since 1980 and only 25% of the country comprehensively explored for energy resources. As of 2011, Iraq had around 80 commercial oilfields and daily oil production averaged 2.65 million barrels per day (b/d).
While, if completed, the deals signed during Iraq’s licensing rounds would raise production to 12 million b/d by 2017, the report predicts a more conservative estimate of a minimum of around 6 million b/d and a maximum 8 million b/d by the end of 2017.
Part of the reason for this slower growth, the report claims, is the lack of definitive revenue sharing, federal oil investment and national hydrocarbon laws, although with the previously delayed Fourth Licensing Round due to take place on May 30th and 31st 2012, the report cites causes for optimism. The report stresses, however, that the round’s status still remains far from certain, due to political wrangling between the Iraqi Executive and the Parliament.