- Title: IRAQ: Country expects oil growth to nearly double goverment spending
- Date: 11th October 2012
- Summary: BAGHDAD, IRAQ (OCTOBER 10, 2012) (REUTERS) DEPUTY PRIME MINISTER FOR ENERGY AFFAIRS HUSSEIN AL-SHAHRISTANI SITTING BEHIND PODIUM DURING CONFERENCE IRAQ ENERGY OUTLOOK SIGN AL-SHAHRISTANI WALKING TO PODIUM CAMERAMAN (SOUNDBNITE) (English) HUSSAIN AL-SHAHRISTANI DEPUTY PRIME MINISTER FOR ENERGY , SAYING: "The conclusion of our studies and those of independent consultants engaged with the Ministry of Oil are that it's feasible and desirable for Iraq to raise its oil production to about 9-10 million bpd by 2020, and Iraq can sustain that production for at least 20 years." ATTENDANTS (SOUNDBITE) (English) HUSSAIN AL-SHAHRISTANI DEPUTY PRIME MINISTER FOR ENERGY , SAYING "The present Iraq oil policy has enabled the government of Iraq to double its budget in just three years, and it is expected, it will increase, the budget will increase, by another eighty percent in the coming three years, and then it will raise to more than five hundred billion dollars by 2020. "
- Embargoed: 26th October 2012 13:00
- Location: Iraq
- Country: Iraq
- Topics: Business,Industry,Politics
- Reuters ID: LVA8VNVSHAFLIPXS49TSNNON3QSU
- Story Text: Iraq's expansion of its oil industry will let the government nearly double spending over the next three years, the deputy prime minister for energy said on Wednesday (October 10).
The Iraqi parliament approved a budget of 100 billion U.S. Dollars (USD) for 2012 in February, based on an average oil price of 85 USD per barrel and 2.6 million bpd USD in exports.
Since OPEC ministers last met in June, Brent crude oil prices <LCOc1> have surged about 20 percent and have hovered around 112-117 USD a barrel since mid-August, despite fragile economic growth in many consuming countries.
"The present Iraq oil policy has enabled the government of Iraq to double its budget in just three years, and it is expected, it will increase, the budget will increase, by another eighty percent in the coming three years, and then it will raise to more than five hundred billion dollars by 2020," Hussain al-Shahristani said.
Iraq, a member of the Organisation of the Petroleum Exporting Countries (OPEC), has the world's fourth-largest oil reserves and has focused on building up its oil industry, which funds about 95 percent of its budget, after years of crippling wars and sanctions.
Shahristani said earlier on Wednesday the country aimed to produce 5-6 million barrels of oil per day (bpd) by 2015, with a view to reaching a target of 9-10 million bpd by 2020. Current production was 3.4 million bpd, he added. [ID:nL6E8LA5X3] Shahristani also said he expected spending in the more distant future to rise to more than 500 billion USD by 2020.
In September Iraq sent a preliminary budget of 118 billion USD for 2013 to the cabinet for approval, based on a world oil price of 90 USD a barrel and oil exports at 2.9 million bpd.
Iraq's oil production, which stagnated for years due to wars and sanctions, started to rise in earnest in 2010, after Baghdad secured service contracts with companies such as BP, Exxon Mobil, Eni and Royal Dutch Shell.
In its outlook published on Tuesday (October 9), the Paris-based IEA said it saw Iraq's oil production reaching 6.1 million bpd by the end of this decade under its central scenario.
Infrastructure bottlenecks, red tape and bureaucracy have hindered development of the industry.
Separately, the head of Iraq's state-run South Oil Co. said it had picked U.S. firm CH2M Hill for a contract worth 170 million USD to help manage a multi billion-dollar water oilfield injection project.
The scheme aims to help raise extraction rates and maintain reservoir pressure to overcome declines in production at fields such as West Qurna, Majnoon, Zubair and Rumaila.
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