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ViewpointOctober 3 2011

Oil minister plans to show the world Iraq's potential

The Iraq government’s plans to increase oil exports from 2.2 million barrels per day to 4 million opens up a wealth of investment opportunities. Oil minister Abdul Karim al-Luaibi tells Courtney Fingar what this could mean for the conflict-torn country.
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Oil minister plans to show the world Iraq's potential

Q: If you look forward five or 10 years, where do you think Iraq will be as an oil producer? What kind of volumes would you expect and what kind of clout would you have in the global oil industry?

A: Personally, I am very optimistic regarding this outlook. We look forward to Iraq, even in less than five years, being a top oil-producing and exporting country. We set a target for the term of the current government. Our target is to export more than 4 million barrels a day at the end of this term. Of course, we are in a position to make a fully integrated plan to absorb all the expected increases and build appropriate infrastructure.

At the end of this year we are going to complete the first phase of the development of the Basra oil terminal. This important project will increase the export capacity of the Basra terminal to more than 5 million barrels a day.

We have other plans to develop our export outlets from Turkey – this would account for more than 1 million barrels a day. We also have a pipeline network system, Trans-Syria, at a capacity of 3 million barrels a day. We are talking seriously about a capacity of more than 10 million barrels a day as a whole.

Of course, we are keen to supply the oil markets according to the needs of that market. According to the information available to us, in the coming years Iraq is going to be the only qualified country to increase its production capacity by high levels because it owns a great number of large undeveloped fields.

But the reign of big exploration processes is over. Now, [throughout] the world, there are no big exploration discoveries, whereas we are talking about 75 fields. If developed, the figures would be considerable.

According to the information available to us, in the coming years Iraq is going to be the only qualified country to increase its production capacity by high levels because it owns a great number of large undeveloped fields

Abdul Karim al-Luaibi

The explored regions in Iraq are very limited and minor, therefore our plans for the next five years include concentrating on exploration activities. We have set a very specific plan accordingly. A part of this would be going on the fourth licensing round, where 12 exploration blocks would be determined and specified.

I would also like to emphasise that in the coming years, Iraq will witness a new industry of gas processing. We look forward to increasing capacity due to the growing need for gas. We also aim to be among the top exporters of gas, especially in the Middle East and Europe. We have planned projects based around this prospect.

Q: Do you feel that the contracts with the international oil companies have been fair and advantageous to Iraq? Recently there has been criticism of BP’s contract in the international media and claims that the contract has been revised in a way that is more favourable to the company than to Iraq. How do you respond to this?

A: I would like to point out that all these contracts that have been approved and certified (what we call service contracts) are simple, clear and explicit. All these contracts were carried out with a transparent process and very clearly set. These contracts were done not only by Iraqi national cadres, but we have tried to use the experiences of other international companies regarding this matter.

Q: What messages are you keen to communicate to companies interested to come and service the oil industry in Iraq, and international oil companies themselves about Iraq?

A: In spite of the success and the excellent progress that I have just pointed out, I always reiterate for the international oil companies that [Iraq's future will only get] better and better. Improvements are continuing on all levels – security wise and legislation wise. This will really protect investors, in terms of people’s understanding and co-operation and, most of all, the support rendered by the government and the people. All these are very encouraging factors.

Iraq has a wealth of resources, rich history, ancient civilisation, considerable financial revenues and natural wealth. [Hopefully], progress will be swift, not only in the oil sector but in other sectors as well.

But for the oil sector, 'the renaissance' is very clear. When we talk about reality, about figures, we currently export 2.2 million barrels a day, compared with last year's figure of 1.89 million barrels [a day]. We also look forward in the coming year to seeing an increase in exports to 2.5 million barrels a day. Then the oil industry will really appreciate the volume of those figures.

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Read more about:  Analysis & opinion , Middle East , Iraq , Viewpoint