Oil Minister: We plan to increase production to 8.5 million barrels and this is the r
Oil Minister: We plan to increase production to 8.5 million barrels and this is the right price
Reuters) – Iraq plans to increase its oil production and export capacity in 2019, focusing on its southern fields and is close to reaching an agreement with international companies, Oil Minister Thamer Ghadhban said on Tuesday.
The new minister said that “the lack of oil supply resulting from the new US sanctions on Iran was not yet measured before Iraq and the rest of the members of OPEC decide to take action at the next meeting of the Organization next month.
Iraq, the second largest producer of crude in OPEC after Saudi Arabia, With a production capacity of 5 million barrels per day in 2019. Its average exports are expected to reach 3.8 million barrels a day.
Iraq currently pumps 4.6 million barrels per day and exports most of its oil through its southern ports. Crude exports through these ports On 95 percent of government revenue .
“This is a priority, we have a dialogue with international companies, and it took a while, but we are about to agree, we will resolve this issue soon,” Ghadhban told Reuters in his first interview since taking office last month.
Iraq plans to increase its export capacity to 8.5 million bpd in the coming years after upgrading its infrastructure, Ghadhban said.
This will include 6.5 million barrels per day of oil fields in the south of the country, with the availability of one million barrels per day after the completion of the construction of a new pipeline extending from the city of Kirkuk in northern Iraq to the Turkish port of Ceyhan overlooking the Mediterranean Sea.
Iraq is trying to recover from the years of violence that have wreaked havoc with Baghdad and badly damaged infrastructure. Baghdad is also trying to reduce corruption and resolve disputes with the Kurdistan region, which runs oil-rich areas in the north of the country.
Ghadban, who replaced Jabbar al-Luaibi as oil minister, is also looking to diversify Iraqi oil export outlets through new pipelines.
One of the immediate challenges for Iraq is to gauge the size of the global oil shortage caused by the sanctions Washington imposed on Iran’s oil sector on Monday.
Ghadban said Iraq wanted to know the “actual decline” before Baghdad and other members of the Organization of the Petroleum Exporting Countries decided how to deal with the drop in Iranian shipments.
“How will the demand for Iraqi oil increase in the present market, and if there is no demand, how can I say that we will make up?”
Ghadban does not specify the price of oil he expects for 2019, but said a price above $ 70 a barrel would be “fair and the higher the price, the better for Iraq.”
“I compare that with previous prices, when we talk about prices above 70, I say it’s a fair price, it’s not 30 or 50 and not 100.”
“In principle, the higher the price, the better for Iraq, but we do not work alone, we are an OPEC member, we see the interests of consumers and we want to be productive and effective source.”
US sanctions target Iran’s oil, banking and transportation sectors, and Washington has threatened to take further action to halt what it says are “outlaw” policies in steps Iran has described as economic war and vowed to tackle.
Iraqi officials said last week that Baghdad would be allowed to continue importing gas and power supplies needed to run power plants, as well as food commodities.
Ghadhban said the Iraqi Oil Ministry had received offers from three foreign contractors to build a giant water treatment plant, a project necessary for the OPEC member to boost its oil production capacity.
He said he expected to start work in early 2019, and cost the project billions of dollars.
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