Iraq’s oil production will only grow marginally over the next 10 years despite its potential capacity, which stands at as much as 7 million bpd, an analyst from IHS Markit has forecast.
According to Christopher Elsner, OPEC’s second-largest producer will only be able to boost production to 5 million bpd over the next decade, and by 2036 it would only grow to 6 million bpd, Arab News reports.
The reason for the country’s inability to boost production considerably is the political and economic situation. Iraq is currently dealing with protests in the south prompted by problems ranging from a lack of access to clean drinking water and electricity to high jobless rates.
But there are also industry-specific problems, according to Elsner, and most of them have to do with money. Noting that the estimated production numbers were “conservative”, Elsner explained, “There is a lot of investment in getting wells out of the ground. And there’s a lot of investment in exporting that oil. But the connections between the oil fields and the storage farms in the south and the export points have been what has really led to the bottlenecks in Iraq.”
Pipeline shortages and lack of electricity in some fields were also among the challenges that Iraq needs to overcome if it wants to boost its production more considerably and more quickly.
Iraq had oil reserves of 153 billion barrels as of last year, but earlier this year Oil Minister Jabar al-Luaibi said the actual reserves could be twice as large. If the higher estimate proves true, it would make Iraq the largest oil-rich country in the world, ahead of Venezuela, which claims its reserves are just above 300 billion barrels, and also ahead of Saudi Arabia, with 260.8 billion barrels.
Even so, developing these reserves will still require a lot of capital and infrastructure expansion that Iraq is currently finding difficult to find and build, respectively.