Baghdad – INA – Amina Al-Salami
The financial advisor to the Prime Minister, Mazhar Muhammad Salih, revealed today, Wednesday, a plan to dispense with importing gas from neighboring countries, while he set two goals behind investing in oil fields and doubling production.
Saleh told the (INA): “Iraq’s share of crude oil production remained at its maximum capacity of about 4 million barrels per day,” indicating that “this limited production came as a result of the country losing opportunities to develop its oil fields as a result of the wars and conflicts that have occurred during the past forty years.”
He added, “The country has lost its optimal share in the global oil markets as a result of the decline in the development of oil fields and their restriction to a fixed production ceiling that is not commensurate with the oil wealth and proven reserves of oil stocks, the development of which has been hampered for the purpose of raising production levels over the past four decades.”
He pointed out that “Iraq was supposed to produce no less than 12 million barrels of crude oil per day to become the world’s number one exporter,” warning that “the disruption of exploration and development activities of oil fields during the last four decades represented a loss of investment opportunities in oil fields, as Iraq’s natural share and rights in the oil market went to other OPEC countries, especially when sharing production quotas.”
He explained that “the current oil production, the quantities of associated gas that are invested, and the policy of zeroing its burning during the year 2028 and directing it after treatment to operate gas-fired power plants are all matters that will undoubtedly eliminate the need to import gas from neighboring countries, but the quantities of gas invested in oil production remain within the limits of electricity production at their maximum capacities from gas-fired power plants according to their current capacities, which are estimated at around 25,000 megawatts.”
He added, “The goal of producing 50,000 megawatts of electricity to sustain the continuous supply of electrical energy will put us in front of two options: either to continue importing gas from outside the country, or to invest in oil fields and double crude production to no less than 8 million barrels of oil per day; so that the gas associated with electricity production is available according to the targeted production capacities to be reached by the end of the current decade of about 50,000 megawatts or more.”
He added, “Investing in oil fields and doubling production will lead to achieving two positive goals: the first is increasing export capacity to world markets and achieving financial returns commensurate with the need for economic growth and development financing, and the second is doubling the quantities of refined gas for the purpose of using it as an input to generate electricity at the target level of 50,000 megawatts or more after 2028.”
He added, “The markets’ need for crude oil will continue to increase until the year 2060, in addition to the need of the major Asian economies (India and China) for crude oil, as they are two important trading partners and import two-thirds of Iraq’s oil exports.”
He continued, “Many oil fields in the world’s oil-producing regions have reached a production level called ‘marginal production’, meaning that oil revenues do not cover production costs except at high prices per barrel of oil. However, with the exception of Iraqi oil, the production costs per barrel of crude oil are the lowest in the world of the extractive oil industry, which is a relative advantage that Iraq enjoys compared to many countries that produce crude oil in the world and encourages maximizing production to reach higher levels required by Iraq’s development renaissance in the future.”