The International Energy Agency (IEA) has completed a major new study which has deducted that within two decades Iraq could overtake Russia to become the world’s second largest oil exporter, and could also be responsible for nearly half of all anticipated growth in global oil production.
The report explained that in order to achieve this position Iraq must solve its internal disputes with the autonomous Kurdish region in the North, and increase its current annual investment in the oil sector from $9 billion to 25 billion until at least 2020.
Fatih Birol, the IEA’s chief economist, explained that “developments in Iraq's energy sector are critical for the country's prospects and also for the health of the global economy. But success is not assured, and failure to achieve the anticipated increase in Iraq's oil supply would put global oil markets on course for troubled waters.”
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This year, for the first time in 30 years, Iraq’s oil production exceeded 3 million barrels a day, overtaking Iran to become the second largest producer in the OPEC group. The study says that Iraq’s output can reach 6.1 million barrels a day by 2020, and 8.3 million barrels a day by 2035; with nearly 80% going to China.
It says that “Iraq stands to gain almost $5tn (£3tn) in revenues from oil export over the period to 2035, an annual average of $200bn and an opportunity to transform the country's future prospects. Achieving the required level of oil production and export will require rapid, co-ordinated progress all along the energy supply chain.”
By. James Burgess of Oilprice.com