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The Growing Role Of Iraq On The Global Energy Market – AnalysisBy: Richard Rousseau
January 18, 2013
The recent re-launch of the Iraqi oil industry, underdeveloped since the early 1980s, can only positively contribute to the stability of the country. The war against Iran (1980-1988), the two Gulf Wars (1991, 2003), the international embargo and the difficult reconstruction have prevented the Iraqi energy sector from reaching its potential. Unexplored reserves and the growing international demand for crude oil will create great opportunities, not only for the country but also for the stability of the international market which is subject to spiralling energy consumption in emerging economies.
Iraq is already the third largest exporter of crude oil and has the fifth largest known oil reserves. In 2011, oil and gas revenues from accounted not only for almost all of the government’s budget, but also for two-thirds (66%) of the country’s gross domestic product (GDP) – in Saudi Arabia, for example, oil revenues account for just over half (52%) of GDP.
Iraq
In June 2012, oil production stood at around three million barrels per day, of which just under two and a half were exported. Therefore, Iraq is still not able to reach the peak level of production it recorded in the late 1970s, when it produced on average three and a half million barrels per day. Currently, the bulk of exports are passing through the port terminals in the south of the country, while the rest reaches the Turkish port of Ceyhan on the Mediterranean coast through a northern pipeline route. Eighty percent of oil production still comes from the two historical fields of Kirkuk and Rumaila, respectively in the north and south of the country. The end of Saddam Hussein’s regime brought an increasing number of foreign players in the country. Multinational oil companies now control more than two-thirds of crude oil production. The recent opening to foreign energy groups has led to the arrival of much-needed know-how, expertise and technology. This cooperation with foreign companies provides support to boost production and provide overall capacity to domestic industry.
However, the lack of investment in infrastructure remains a major constraint. The range of petroleum products produced by domestic refineries is insufficient considering the considerable needs of the country. Gasoline represents only 15% of total annual production, while half of petroleum products is represented by heavy crude oil. Iraq is then forced to rely on imports for 30 percent of its gasoline and 17 percent of its Liquefied Petroleum Gas (LPG).
Despite a lack of appropriate investments, Iraq has acquired a growing importance in the international market. Its exports are oriented more and more towards the emerging economies, which now buy half of its crude oil, while Western countries account for one fourth (25%).
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Search Eurasia Review
The Growing Role Of Iraq On The Global Energy Market – AnalysisBy: Richard Rousseau
January 18, 2013
The recent re-launch of the Iraqi oil industry, underdeveloped since the early 1980s, can only positively contribute to the stability of the country. The war against Iran (1980-1988), the two Gulf Wars (1991, 2003), the international embargo and the difficult reconstruction have prevented the Iraqi energy sector from reaching its potential. Unexplored reserves and the growing international demand for crude oil will create great opportunities, not only for the country but also for the stability of the international market which is subject to spiralling energy consumption in emerging economies.
Iraq is already the third largest exporter of crude oil and has the fifth largest known oil reserves. In 2011, oil and gas revenues from accounted not only for almost all of the government’s budget, but also for two-thirds (66%) of the country’s gross domestic product (GDP) – in Saudi Arabia, for example, oil revenues account for just over half (52%) of GDP.
Iraq
In June 2012, oil production stood at around three million barrels per day, of which just under two and a half were exported. Therefore, Iraq is still not able to reach the peak level of production it recorded in the late 1970s, when it produced on average three and a half million barrels per day. Currently, the bulk of exports are passing through the port terminals in the south of the country, while the rest reaches the Turkish port of Ceyhan on the Mediterranean coast through a northern pipeline route. Eighty percent of oil production still comes from the two historical fields of Kirkuk and Rumaila, respectively in the north and south of the country. The end of Saddam Hussein’s regime brought an increasing number of foreign players in the country. Multinational oil companies now control more than two-thirds of crude oil production. The recent opening to foreign energy groups has led to the arrival of much-needed know-how, expertise and technology. This cooperation with foreign companies provides support to boost production and provide overall capacity to domestic industry.
However, the lack of investment in infrastructure remains a major constraint. The range of petroleum products produced by domestic refineries is insufficient considering the considerable needs of the country. Gasoline represents only 15% of total annual production, while half of petroleum products is represented by heavy crude oil. Iraq is then forced to rely on imports for 30 percent of its gasoline and 17 percent of its Liquefied Petroleum Gas (LPG).
Despite a lack of appropriate investments, Iraq has acquired a growing importance in the international market. Its exports are oriented more and more towards the emerging economies, which now buy half of its crude oil, while Western countries account for one fourth (25%).
[You must be registered and logged in to see this link.]
