Iraq’s upstream trade is altering dramatically, and it has the assets to extend each oil and fuel output significantly.
That’s what Alexandre Araman, a Director at Wooden Mackenzie, mentioned in a launch despatched to Rigzone lately, including that “company curiosity is growing as there are a number of entry alternatives of scale”.
“Lots of the majors are re-evaluating their presence, given the low returns on provide from traditionally punitive fiscal phrases, with keen consumers in South East Asian NOCs and China’s state-backed gamers,” Araman continued.
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The discharge, which was despatched by the Wooden Mackenzie group, highlighted that, based on a report from the corporate, “Iraq’s fuel output might greater than double by 2030 to succeed in 4.4 billion cubic ft per day and oil output might hit 5.5 million barrels per day in that very same timeframe”.
Wooden Mackenzie’s launch additionally famous, nevertheless, that the corporate’s report “highlights that many challenges stay”.
“Operators should overcome a number of roadblocks proper now if manufacturing is to be elevated, most notably with infrastructure, as export pipelines and terminals, and water injection capability is presently inadequate,” Araman acknowledged within the launch, including that “there are additionally fiscal points, as creating worth from barrels is tough.”
The tough fiscal phrases have discouraged each international funding and exploration exercise, Wooden Mackenzie acknowledged within the launch.
“Regardless of greater than 150 billion barrels of oil assets, solely 5 exploration wells have been drilled in Federal Iraq since 2013,” the corporate highlighted.
Wooden Mackenzie did, nevertheless, state in its launch that current licensing rounds in 2024 confirmed appreciable curiosity from Chinese language companies. It outlined that this demonstrated “the rising curiosity from Asian-based buyers”.
“This additionally highlights how Iraq’s company ecosystem has advanced and expanded over time, as extra gamers from extra numerous geographies, however Asia specifically, have been interested in Iraqi upstream alternatives,” Wooden Mackenzie mentioned within the launch.
“Nonetheless, extra of this consideration has been to found assets than exploration potential,” it added.
Araman warned within the launch that “Iraq’s fiscal phrases are nonetheless among the many least aggressive within the Center East” and mentioned “far more needs to be executed to extend exploration curiosity”.
“If that’s addressed, it’s possible we are going to see extra exercise from Asian gamers as the company panorama in Iraq is shifting from West to East,” Araman added.
“With enhancements in fiscal phrases and significant infrastructure, there needs to be a window of alternative for extra M&A exercise and future manufacturing development,” Araman continued.
In response to the U.S. Power Info Administration’s (EIA) newest brief time period vitality outlook, which was launched earlier this month, Iraq’s petroleum and different liquid fuels manufacturing averaged 4.40 million barrels per day within the first quarter of 2024 and 4.35 million barrels per day within the second quarter. The nation’s petroleum and different liquid fuels manufacturing got here in at 4.42 million barrels per day in 2023, the STEO confirmed.
The EIA’s petroleum and different liquid fuels manufacturing figures embody crude oil, lease condensate, pure fuel plant liquids, different liquids, refinery processing acquire, and different unaccounted for liquids.
Iraq’s crude oil manufacturing averaged 4.32 million barrels per day in 2023, 4.29 million barrels per day within the first quarter of this 12 months, and 4.24 million barrels per day within the second quarter of 2024, based on the STEO.
Iraq is without doubt one of the 5 founding member international locations of the Group of Petroleum Exporting Nations (OPEC), OPEC’s web site highlights. The positioning exhibits that the nation has confirmed crude oil reserves of 145 billion barrels and confirmed pure fuel reserves of three.7 trillion cubic meters.
Iraq’s crude oil manufacturing got here in at 4.11 million barrels per day in 2023 and its marketed manufacturing of pure fuel was 10.96 billion cubic meters final 12 months, OPEC’s web site highlighted.
An announcement posted on OPEC’s web site final month revealed that the OPEC Secretariat acquired compensation plans from Iraq for its “overproduced volumes for the primary six months of 2024”. The assertion highlighted that this totaled about 1.184 million barrels per day “based on assessments made by the impartial sources permitted within the Declaration of Cooperation”.
“The complete over-produced volumes will likely be absolutely compensated for by September 2025,” the assertion famous.
In response to a manufacturing desk accompanying a press release posted on OPEC’s web site on June 2, following the most recent OPEC and non-OPEC ministerial assembly, Iraq’s required manufacturing degree for 2025 is 4.431 million barrels per day. This required manufacturing degree “is earlier than making use of any extra manufacturing changes”, the desk highlighted.
To contact the creator, electronic mail andreas.exarheas@rigzone.com
