Lack of Federal Oil Law Cripples Iraq's Recovery

New oil export terminals have been opened in the past year but if crude oil output is really going to rise at the rate proposed so boldly by Baghdad, existing terminals will have to be expanded or additional ones built.

The same is true of pipelines. There is a line, for example, from the Kirkuk field to the Syrian port of Baniyas, but it has not been operational since 2003. Another pipeline, from Kirkuk to Ceyhan, a Turkish port, was designed to handle 1.6m bpd but at present can cope with only 300,000 bpd. Another pipeline through Saudi Arabia was closed by the kingdom after Iraq invaded Kuwait in 1990; it has reportedly just reopened.

Even if all these issues of law, politics and infrastructure can be managed successfully, however, Iraq will face one more hurdle: pairing its production with international consumers.

For decades, the Opec cartel has operated on the assumption that Iraq would produce 3 million bpd or less. The International Energy Administration estimates that Iraq's share of Opec crude oil production will increase from 11.69 per cent in 2015 to a remarkable 15.76 per cent in 2030. Such a rapid increase in share has rarely been seen, and will surely bring with it some market disruptions.

Thomas W Donovan is an attorney at the Iraq Law Alliance

One Response to Lack of Federal Oil Law Cripples Iraq's Recovery

  1. […] measures to bring about preferred policies such as limiting de-Baathification or regularizing how oil is produced and its revenues distributed – two legislative initiatives that […]

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    […] measures to bring about preferred policies such as limiting de-Baathification or regularizing how oil is produced and its revenues distributed – two legislative initiatives that […]