Iraqi Oil Production Could Double to 6.1 Million Barrels in 2020, IEA Says

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Researched by Industrial Info Resources (Sugar Land, Texas)--The International Energy Agency (IEA), the Paris-based energy watchdog of developed countries, forecasted in its "Iraq Oil Report," published this week, that Iraq's oil production will double by 2020. The IEA said Iraq's production could reach 6.1 million barrels per day (BBL/d) by 2020, from about 3 million BBL/d currently.

"This is much lower than the contracted projects and much lower than the Iraqi government's official targets," said Fatih Birol, the IEA's chief economist, in a press conference in London. Iraq's government is expecting to achieve an output capacity of more than 12 million BBL/d by 2017, under the contracts it has signed with foreign companies.

If Iraqi production expands as IEA predicts, the global dynamics of crude oil will change and will make the country the dominant force to settle oil prices. The IEA said that $530 billion will be needed to invest in oil storage, transportation and other infrastructure until 2020. This estimate equates to a $25 billion investment annually, almost three times more than the estimated $9 billion spent in 2011.

The IEA also said that this investment could lead oil export revenues of as much as $5 trillion until 2035, an annual average of $200 billion. According to figures from the Organization of Petroleum Exporting Companies (OPEC), Iraq pumped 3.1 million BBL/d in August, up from 2.4 million BBL/d in 2010. Iraq recently bolstered exports to 20-year highs and passed sanctions-laden Iran as OPEC's second-biggest oil producer. Iraq's oil production stagnated for years due to wars and sanctions, even though the country holds the world's fourth-largest oil reserves.

Output started to rise in earnest in 2010, after the Iraqi government secured contracts with companies such as BP plc (NYSE:BP) (London, England), ExxonMobil (NYSE:XOM) (Houston, Texas), Eni SpA (NYSE:E) (Rome, Italy) and Anglo-Dutch oil company Royal Dutch Shell plc (NYSE:RDS.A) (The Hague, Netherlands).

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