Iraq has succeeded in ramping up oil production by more than 1 million barrels per day over the past two years, a remarkable achievement for a country that was torn apart by the lightning advances made by the Islamic State.
But Iraq’s success could be running up against a wall at this point, as low oil prices sap the state of the resources it needs to invest in further production. Iraq finances the investments in the state’s oil production, with much of the work carried out by international companies such as Lukoil, BP and Royal Dutch Shell. The meltdown in crude oil prices has led to a sharp fall in state revenue. Without that revenue, Iraq and its partner companies are being forced to scale back their ambitions.
The Wall Street Journal reports that the international companies operating Iraq’s massive oil fields outside of Basra in the south are trimming their drilling plans. “You’re going through difficult months,” Ariel Flores, GM of the BP-led Rumaila Operating Organization, told the WSJ in an interview. “You slow down and you make decisions to pause efforts.” Rumaila, considered to be the second largest oil field in the entire world, will see production stay flat at 1.4 mb/d. Shell and Lukoil are also cutting back on their efforts to boost production at several of their key fields, though they had ambitious plans to do so. Instead, they are focusing on keeping output from falling.
Production stands at about 4.3 million barrels per day, up substantially from the 3.27 mb/d Iraq averaged in 2014. But further gains would require more drilling and a lot more money for investment – something that is increasingly scarce in Iraq.
By Charles Kennedy of Oilprice.com
Anonymous on Sat, 24th Sep 2016 4:08 pm
Left unstated: Iraq’s production levels were just fine, right up until the point the empire of chaos and terror(that’d be the merikan empire and its tag-alongs case ye were still wunnerin) launched its illegal, immoral and unjustified ‘shock and awe’ campaign. Ostensibly, to save the world from Iraqi WomD. You know, the ones that never existed, except in the minds of pentagon and uS state dept pys-ops specialists and their counterparts in the MSM, and the private PR firms hired to peddle that lie.
Kenz300 on Sun, 25th Sep 2016 9:20 am
The sooner the world moves away from fossil fuels the better. No more wars for oil.
Climate Change is real. It will be the defining issue of our lives.
Electric cars, trucks, bicycles and mass transit are the future. fossil fuel ICE cars are the past.
Think teen agers vs your grand father. cell phones vs land lines.
Save money. no stopping at gas stations. no oil changes .less overall maintenance.
The transition to electric vehicles will help deal with the issues of Climate Change.