Iraq's Oil Industry: Challenges and Opportunities

As Iraq strives to increase its oil production to maintain current levels and beyond 6.35 million barrels per day (b/d), significant investments are required in drilling new wells and expanding existing surface facilities. The country's oil industry faces substantial challenges, including the need to drill thousands of wells over the next decade, add new surface facilities in 21 fields, and expand existing facilities in 11 other fields. Iraq has six "super-giant" oil fields, each containing over 6 billion barrels of recoverable oil, and numerous other oil-bearing structures, including over 155 in the western desert.

Key Takeaways:

• Iraq needs to drill thousands of wells over the next decade to maintain current oil production levels and beyond 6.35m b/d.
• New surface facilities must be added in 21 oil fields, and existing facilities expanded in 11 other fields, over a period of five to ten years.
• Iraq has six "super-giant" oil fields, each containing over 6 billion barrels of recoverable oil.
• Over 155 oil-bearing structures exist in the western desert, an area yet to be fully explored.
• Companies from France, Russia, and China have been awarded contracts to develop Iraq's important oil fields.
• US majors, such as Mobil and Exxon, are barred from operating in Iraq due to US administration restrictions.
• European oil companies have filled the gap, while Saudi Arabia and Kuwait refuse to grant US majors oil production sharing agreements (PSAs).

Statistics:

• 6.35 million barrels per day (b/d) current oil production target
• 6 billion barrels of recoverable oil per "super-giant" oil field
• 155 oil-bearing structures in the western desert
• $15m worth of spare parts arrived in Iraq since 1996 oil exports began
• $270m worth of spare parts on order in late April 1999
• $300m of approved spare parts under the UN deal (approved in October 1998)
• $600m worth of equipment and spare parts to be received under the UN deal

Sources:

• UN deal for oil production and equipment
• October 1998 memo on approved spare parts
• April 1999 report on spare parts on order
• Iraqi oil industry statistics and development plans