Three Arab Oil Phenomena in 2008
Posted: Mon 14 Apr 2008, 01:02:18
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The year 2008 has been characterized by three Arab oil phenomena with significant future implications. These are summed up in the noticeable expansion in crude oil and natural gas production capacity, the significant increase in the capacity of refineries, and the ongoing establishment of private Arab oil companies.
With respect to the first phenomenon, negotiations are currently underway with major international oil companies to explore new oil and gas reserves and to expand production capacity in Iraq, Libya and Algeria. If these negotiations succeed, it may be possible to increase crude oil production capacity by approximately half a million barrels per day in Iraq within one year only by improving the productivity of currently exploited fields, especially if the security situation stabilizes in the south.
Potential increases are also possible in Algeria where state-owned Sonatrach has been able to increase crude oil production from 750,000 barrels per day in the early 1990s up to almost 1.4 million barrels per day with the help of international firms. This is not to mention the noticeable increase witnessed in the production of oil fluids and natural gas. Sonatrach has been able to make these achievements despite the security apprehension dominating the country throughout the period.
In Libya, the Libyan National Oil Company is working on doubling production capacity from 1.6 million barrels per day which has been the capacity over the past two decades as a result of international blockade and embargo.