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01-05-2010, 01:45 AM #1
Iraqi Oil Could Transform The Global Oil Market In Next Decade
raq is struggling with its political and security issues for quite a long time. But now, it seems to be in the path of restructuring its economy. According to experts, after a series of deals between Iraq government and foreign oil companies, it is expected that Iraqi oil will transform the global oil market in the next decade.
Iraq has a proven reserve of 115 billion barrels of oil and is now the third largest country in oil reserve behind Saudi Arabia and Iran. But, the current analysis is based on the previous data on the ageing oil fields. So, it might be more than the expected as there is huge potential of oil discoveries in this war torn nation.
According to Iraq oil ministry report, Crude oil exports have reached 58.2 million barrels in October this year, generating $4.19 billion in revenue to the nation.
The major companies which have been signed in this regard include, ExxonMobil, Eni (Italy) and BP. Similar talks are also on the way to include Royal Dutch Shell and CNPC (China).
According to economist Robert Powell, "This is a huge amount of oil, and the increase will be beyond what has been contracted."
The deals are part of the country's bid to come to the path of recovery after incessant fights and bombings.
Iraq hopes to increase its oil output to 7 million barrels per day, which is thrice the existing 2.5 million bpd.
However, some analysts are dubious about Iraq's oil production. And, they say it as a speculation only.
According to analysts, the bidding scenario is also not satisfactory as most of the bidders are unable to match the biding fee fixed by the government.
According to Robert Powell, the EIU has forecast the oil price as around $75 per barrel by the beginning of the year and it may go down in 2011.
It has been reported that the overall oil revenues were higher before the attack on the country’s Kirkuk region.
Security in Iraq remains one of the main obstacles facing international companies who would like to operate there.
Stating the state of security in oil production, Powell said, "(Even) with this level of violence, companies are still interested and believe they can operate in the country."
"All companies are betting on maximum level of production," he said.
The other obstacles for the companies in Iraq include, land ownership, infrastructure and fear of legal protection. But, the analysts are optimistic about the deals saying that these contracts will hugely affect the global market