Due to this, officials are currently trying to dramatically increase the sale of oil in the coming years in the hope that this can bolster Iraq’s failing infrastructure. By 2017, Iraqi officials hope that production can reach as much as 9 million barrels per day. The IMF, however, think that this isn’t possible.
Are Iraq’s Targets Manageable?
On recent evidence, we would have to assume that the IMF may in fact be correct. Earlier this month, Exxon Mobil sold half of its stake in Iraq’s West Qurna-1 oil field to Asian investors. Some believe that the withdrawal of Exxon Mobil is symbolic of a global shift in thinking about Iraqi oil. Only 5-8 years ago, Big Oil was clambering for a stake in Iraq’s oil fields. Now, it is withdrawing.
It appears certain that this is because of production targets and a failing infrastructure, with the International Energy Agency now believing that Iraq’s oil production will fall by a further half a million barrels per day due to overdue infrastructure work in its southern terminals and unaddressed issues in the hydrocarbon sector.
Back at the height of Iraqi oil production, Iraq’s government set its sights on targeting Saudi Arabia’s 12 million barrels per day productivity by 2017. Although they still have not given up entirely, Iraq’s oil ministry has downgraded this forecast to 9.5 million barrels a day. Even this, however, is poles apart from the IMF’s prediction of 5.7 million barrels per day.
Iraq’s oil still remains valuable for the world, but commodity traders have been watching export and price fluctuations carefully. Underpinning infrastructure and setting realistic goals appears vital going forward.
(Tanker image via Shutterstock)