Iraq could raise its oil production capacity to 6 million bpd over the next five years but no more than that because of constraints weighing on the industry’s expansion, the Deputy Prime Minister of the country, Ali Allawi, said, as quoted by Energy Intelligence, this week.
Iraq is OPEC’s second-largest producer, but it has been struggling to boost production in line with the OPEC+ production expansion agreement that the extended cartel inked last year after demand began to recover after the pandemic.
Per OPEC’s latest Monthly Oil Market Report, Iraq produced some 4.4 million bpd in May, down from 4.426 million bpd in April. The May average production rate was also lower than Iraq’s production rate for the last quarter of 2021. Before the pandemic decimated demand and prompted OPEC and its partners to cut production severely, Iraq was pumping some 4.5 million bpd.
Despite political troubles and doubts about the future of investments in Iraq’s oil, the country’s Oil Minister, Ihsan Abdul Jabbar Ismail, has the ambition to see production capacity at as much as 8 million barrels daily by 2027.
“I don’t think we’ll be expanding our capacity beyond … another 1 million b/d within five years,” his deputy, Allawi, said. According to him, 6 million bpd was a more realistic target for production capacity expansion.
Meanwhile, Big Oil is leaving Iraq, which is one of the reasons for the uncertainty of its oil industry growth’s future. Earlier this week, the news broke that state-owned Basrah Oil Company will buy Exxon’s stake in the West Qurna 1 oil field as the supermajor seeks to exit Iraq.
Meanwhile, Iraq is also expanding into LNG amid growing global demand. Just this week, the country announced the first shipment of liquefied gas from the port of Umm Qasr. Plans are to also export compressed and semi-cooled liquefied gas.
