Iraq oil flows faster, but not fast enough
Friday, 21 March 2008
BAGHDAD/DUBAI, March 20 (Reuters): Five years after the US-led invasion, Iraq's oil sector is at last pumping at the level it managed under Saddam Hussein, but it could take years to make further progress.
Iraq holds the world's third-largest oil reserves, a resource key to meeting future global energy demand and to funding the reconstruction of the country's shattered economy.
But violence, political wrangling and corruption have stalled foreign investment and forced Iraq to produce what it can with ageing oil infrastructure.
"Iraqis have become masters of the patch-it-up approach," said one Western oil company executive. "They have even managed to improve oil output in a very challenging environment, but there is a worrying lack of investment."
Oil exports reached around 2 million barrels per day (bpd) in January and February, a post-war peak around level with shipments under the international sanctions of Saddam's era.
Officials have made upbeat forecasts for higher output. Baghdad aims to pump an average of 2.6 million to 2.7 million bpd over 2008, up from around 2.3 million bpd at the start of the year, Oil Minister Hussain al- Shahristani told Reuters in January.
The latest gains have resulted from improved security around Iraq's giant Kirkuk oilfield and its northern export pipeline to Turkey.
Persistent sabotage and technical problems had kept the route all but idle since the US-led invasion in 2003, but since last summer Iraq has managed to sustain flows.
"The government is determined to restore the prominent status of Iraq as a leading oil-producing state," Asim Jihad, Iraq's oil ministry spokesman, told Reuters Wednesday. "Talks with oil majors are just the first step which will open the way for global companies to develop Iraq's oil industry."
Iraq holds the world's third-largest oil reserves, a resource key to meeting future global energy demand and to funding the reconstruction of the country's shattered economy.
But violence, political wrangling and corruption have stalled foreign investment and forced Iraq to produce what it can with ageing oil infrastructure.
"Iraqis have become masters of the patch-it-up approach," said one Western oil company executive. "They have even managed to improve oil output in a very challenging environment, but there is a worrying lack of investment."
Oil exports reached around 2 million barrels per day (bpd) in January and February, a post-war peak around level with shipments under the international sanctions of Saddam's era.
Officials have made upbeat forecasts for higher output. Baghdad aims to pump an average of 2.6 million to 2.7 million bpd over 2008, up from around 2.3 million bpd at the start of the year, Oil Minister Hussain al- Shahristani told Reuters in January.
The latest gains have resulted from improved security around Iraq's giant Kirkuk oilfield and its northern export pipeline to Turkey.
Persistent sabotage and technical problems had kept the route all but idle since the US-led invasion in 2003, but since last summer Iraq has managed to sustain flows.
"The government is determined to restore the prominent status of Iraq as a leading oil-producing state," Asim Jihad, Iraq's oil ministry spokesman, told Reuters Wednesday. "Talks with oil majors are just the first step which will open the way for global companies to develop Iraq's oil industry."