Mexico



Very usefull links



PW
Bookstore





News links

AP

AFP

Aljazeera

Dow Jones

Oil price

Reuters

Bloomberg

Views and News
from
Norway

 

 

 

 

 

Iraq, the world's fourth-biggest oil producer can't keep the lights on

theglobalobservatory.org

Protests have sparked in Iraq by long-simmering grievances regarding insufficient electricity, water quality, and unemployment. “An increase in production is good news, but Iraq still fails to provide basic services like clean water and power to its citizens, including in Basra where most of the oil is extracted,” said Ziad Daoud, Bloomberg's chief economist in the Middle East.

Play Video:
Oil Heads to a Weekly Decline Amid U.S.-Saudi Tension

- Iraq's political paralysis hasn't dented crude output or sales
- OPEC's No. 2 will be second to U.S. in oil growth until 2025

By Mohammed Sergie

DUBAI
Petroleumworld 10 23 2018

Iraq is fast becoming a global oil powerhouse, gaining stature in OPEC after it surpassed Canada this year as the world's fourth-biggest producer. But the war-ravaged country has little to show for its feat.

While crude markets are preoccupied with Saudi Arabia's ability to boost output as impending U.S. sanctions curb Iranian exports, Iraq has quietly increased shipments to Asia, Europe and the Mediterranean region to offset Iran's missing barrels.

Iraq is producing a record 4.78 million barrels of oil a day, the country's Oil Minister Jabbar Al-Luaibi said on Saturday. Output will rise to 5 million barrels a day in 2019 and 7.5 million in 2024, he said. Consultant Wood Mackenzie Ltd. forecasts Iraq could pump 6 million barrels a day by 2025 and that its output is set to grow faster than for all countries but the U.S. over the next six years.

For all its petro-wealth, Iraq lacks steady electricity supplies and has trouble keeping the lights on -- and attracting the kinds of investment needed to create jobs and spur local businesses.

“An increase in production is good news, but Iraq still fails to provide basic services like clean water and power to its citizens, including in Basra where most of the oil is extracted,” said Ziad Daoud, Bloomberg's chief economist in the Middle East.

Political Tensions

Most indicators in Iraq beyond oil show little promise. Political tensions continue to simmer due to Baghdad's stalemate with the country's semi-autonomous Kurds, a sense of marginalization among the minority Sunnis, and the Shiite majority's discontent with unreliable public services in their southern heartland of Basra province.

Oil prices have doubled since 2016, bolstering Iraq's finances, yet the country's stock index is down 30 percent over the same period. More than $32 billion of foreign direct investment has flowed out of the country over the past five years, according to United Nations data.

Fifteen years after the U.S. led a military coalition to oust Saddam Hussein's regime, “people are frustrated that they don't have 24-hour electricity, that the infrastructure and healthcare are poor,” said Ali Al-Mawlawi, head of research at Baghdad-based think tank Al-Bayan Center. “Wealth isn't trickling down in a fair and equitable way.”

Security improvements and efforts to form a new government are cause for some optimism, Al-Mawlawi said in a phone interview. Yet persistent corruption and a cumbersome bureaucracy make “foreign companies apprehensive about investing,” he said.

None of this seems to matter for the oil industry in Iraq, the second-biggest member of the Organization of Petroleum Exporting Countries after Saudi Arabia.

Oil majors like Exxon Mobil Corp., Total SA, Lukoil PJSC and Gazprom PJSC sat out the latest auction for Iraq's oil and gas blocks in April, but smaller companies from the United Arab Emirates and China succeeded in securing contracts. International oil companies are responsible for two-thirds of Iraq's current production, and their capital and technology are crucial to maintaining and raising output, said Ian Thom, Wood Mackenzie's principal analyst for Middle East upstream.

As long as the government keeps paying foreign oil companies in full and on time, producers can extract reasonable returns from Iraq's low-cost fields, even if crude drops to $30 a barrel, Thom said. Brent crude, the global benchmark, has traded at an average of more than $73 this year.

“Iraq will not struggle to find foreign investors to grow its oil sector,” Daoud said. “The challenge is to attract capital and expertise to benefit the broader economy.”

Original article

_________________________

Story by Jordyn Holman from Bloomberg

bloomberg.com 10 22 2018

_________________________

We invite all our readers to share with us
their views and comments about this article.
Write to editor@petroleumworld.com

By using this link, you agree to allow PW
to publish your comments on our letters page.

Any question or suggestions,
please write to: editor@petroleumworld.com

Best Viewed with IE 5.01+ Windows NT 4.0, '95, '98,ME,XP, Vista, Windows 7,8,10 +/ 800x600 pixels

Twitter: @petroleumworld1

November 13 - 15, 2018.

Gubkin University, Moscow
SPE Student Chapter

 

 

 

 

 

TOP

Contact: editor@petroleumworld.com,

Editor & Publisher:Elio Ohep/
Contact Email: editor@petroleumworld.com

CopyRight © 1999-2016, Paul Ohep F. - All Rights Reserved. Legal Information

PW in Top 100 Energy Sites

CopyRight©1999-2017, Petroleumworld ™  / Elio Ohep - All rights reservedThis site is a public free site and it contains copyrighted material the use of which has not always been specifically authorized by the copyright owner.We are making such material available in our efforts to advance understanding of business, environmental, political, human rights, economic, democracy, scientific, and social justice issues, etc. We believe this constitutes a 'fair use' of any such copyrighted material as provided for in section 107 of the US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed without profit to those who have chosen to view the included information for research, information, and educational purposes. For more information go to: http://www.law.cornell.edu/uscode/17/107.shtml. If you wish to use copyrighted material from this site for purposes of your own that go beyond 'fair use', you must obtain permission fromPetroleumworld or the copyright owner of the material.