Iraq has been reported to be mulling the idea of raising its oil production capacity to 6 million bpd over the next five years, but no more than that because of constraints weighing on the industry’s expansion.
Quoting Iraqi deputy prime minister, Mr. Ali Allawi, Energy Intelligence, said yesterday Iraq believes that six million bpd was a more realistic target for production capacity expansion.
“I don’t think we’ll be expanding our capacity beyond … another 1 million b/d within five years,” his deputy, Allawi, said.
Iraq is OPEC’s second-largest producer, but it is reported to be struggling to boost production in line with the OPEC+ production expansion agreement that the extended cartel agreed in 2021 after demand began to recover shortly after Covid relaxed.
OPEC’s latest Monthly Oil Market Report recorded Iraq with about 4.4million bpd in May, down from 4.426million bpd in April. The report showed that Iraq’s May average production rate was also lower than the country’s production rate for the last quarter of 2021.
Energy Intelligence noted that before the pandemic lowered demand and prompted OPEC and its partners to cut production severely, Iraq was pumping some 4.5 million bpd.
Despite political troubles and doubts about the future of investments in Iraq’s oil, the country’s oil minister, Mr. Ihsan Abdul Jabbar Ismail, has the ambition to see production capacity at as much as 8 million barrels daily by 2027, the report said.
Meanwhile, Big Oil is leaving Iraq, which is one of the reasons for the uncertainty of its oil industry growth’s future. The super majors are the most influential publicly-traded oil and natural gas producers, including BP, Chevron, Eni, ExxonMobil, Shell, and TotalEnergies.
Earlier this week, the news broke that state-owned Basrah Oil Company will buy Exxon’s stake in the West Qurna 1 oil field as the supermajor seeks to exit Iraq.
Meanwhile, Iraq is also reportedly expanding into LNG amid growing global demand. Just this week, the country announced the first shipment of liquefied gas from the port of Umm Qasr.
Plans are to also export compressed and semi-cooled liquefied gas.