Eric Watkins
Oil Diplomacy Editor
Last week, Hussain Al-Shahristani, Iraq's deputy prime minister for energy, said his country's development plans for oil fields are proceeding "normally" and even faster than contracted.
Al-Shahristani said there were no major delays in Iraq's new export facilities being built to handle the extra crude expected from a series of agreements signed with international oil companies.
"We are comfortable that new [oil] export outlets will be ready to received extra crude according to the plans to boost oil production with the contracted oil companies," he said.
Al-Shahristani's remarks followed an announcement by Oil Minister Abdul-Kareem Luaibi that Iraq has signed an agreement with the SNC Lavalin Group for a strategic oil export pipeline.
"Today we have signed a contract with an international consultancy company to execute an important and vital project, which is an oil export facility," said Luaibi.
Pipeline project
The 18-month contract includes pipeline design, feasibility studies, and preparation of tender documents for a pipeline project from oil fields in southern Basra province to neighboring Syria and Turkey.
The project, expected to take 4 years to build, follows statements last year by Iraqi officials concerning two pipelines through Syria to the Mediterranean, one of 1.5 million b/d and the other 1.25 million b/d.
Current political unrest in Syria would not affect the oil export pipeline project, Luaibi said, noting that "there is an MOU [memorandum of understanding] signed with the Syrians to execute this project."
According to Ghassan Ashgar, a senior vice-president at SNC Lavalin, tender documents for the pipeline project should be ready within 6 months.
The announcement of the pipeline project follows earlier reports that Iraq, contrary to speculation, is continuing with its plans to produce 12 million b/d over the next 6 years.
Iraq on track
"We are contracted for announced production capacity of around 12 million b/d," said Al-Shahristani. "But how much we will produce, really, this depends on the international market situation and the market demand," Al-Shahristani said.
The minister's comments followed analysts who questioned whether Iraq could reach the 12 million b/d goal within its announced 6-year timeframe, or whether the market would want or even need that much production.
Even the US Department of Energy recently said that Iraq faced "many challenges" in meeting its ambitious oil production targets.
"One of the most significant is the lack of an outlet for significant increases in crude oil production," DOE said, noting that Iraq's oil exports were at near full capacity in the south, while those in the north had been restricted by sabotage.
The new export pipeline project announced by Al-Shahristani and Luaibi means that someone in Baghdad really is listening.
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