Exploring Hydrocarbon Depletion
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Page added on June 20, 2012
A hydrocarbon law remains a mirage in Baghdad and the reality is dawning that Iraq’s plans to become one of the world’s top-five oil producers are jeopardised by the legal deadlock.
Many oil deals have been signed in the intervening years but the country’s target of pumping 12 million barrels per day (bpd), more than three times the pre-war record and on a par with the Opec powerhouse Saudi Arabia, is still a distant dream.
“For new arrangements to be successful, they have to be in line with the new law that will be ratified … which is still not ratified,” said Rowsch Shaways, the Iraqi deputy prime minister. When Iraq ends the stalemate – which stems from a dispute between Baghdad, the federal capital, and Erbil, the seat of power in the semi-autonomous Kurdistan region – it will have effects well beyond the oil industry.
Funding for infrastructure rebuilding, relationships with foreign governments and economic diversification into areas such as petrochemicals and manufacturing will all be affected.
The uncertainty about Iraq’s future legal framework was one of the factors that helped to dampen interest last month at Iraq’s first auction of exploration blocks since the Saddam Hussein era. Only three of 12 blocks found takers.
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