By Mimi Kirk
Last Friday, MEI hosted HE Dr. Hussain al-Shahristani, the Iraqi Deputy Prime Minister for Energy Affairs, for a talk on “Iraq’s Emerging Role in Meeting World Energy Demand.” Dr. al-Shahristani, who spent more than a decade (1979-1991) as a political prisoner in the infamous Abu Ghraib prison under the regime of Saddam Hussein, has since 2006 played a significant role in the Iraqi government. From 2006-2010, he served as Minister of Oil before being promoted to his current position.
Dr. al-Shahristani spoke about Iraq’s potential for producing petroleum, noting that while the country currently provides 11% of the world’s total reserves, this share could be much greater. Large areas of Iraq have not yet been explored, and many oil fields that have been discovered are classified as “super giant” or “giant.” However, the country’s oil production has been severely compromised due to wars, embargoes, inadequate investment, and an exodus of technical personnel. “The benefits of Iraq’s oil can only be maximized when resources are developed in the most technically appropriate and cost effective manner,” he said.
To remedy this situation, Iraq has begun to develop and increase production in its most productive fields. As such growth can only be accomplished with technical know-how and financial strength, the government invited international oil companies to engage in service contracts (in which the companies invest in oil production but Iraq retains title to the oil and pays the companies in dollars per barrel). So far Iraq has signed 12 of these contracts, with plans for total production of over 11 million barrels/day (up from three million b/d). “We have increased production by about 700,000 b/d in the last 12 months, and we expect to add a similar quantity this year,” said Dr. al-Shahristani. “By 2017, we should be producing 10 million b/d.”
World energy demand is expected to increase by 1.2 percent a year over the coming two decades. Taking into account attempts to develop more environmentally-friendly energy resources, by 2035 it is estimated that oil demand will still increase by 20 million more b/d than today. Almost all the demand increase will come from developing countries, with 80 percent from Asia.
Whatever the future holds, Dr. al-Shahristani concluded, Iraq’s oil fields can provide a buffer to the world oil supply in the coming decades. “Iraqi oil will provide the safety valve and assure the world a supply of crude oil over the coming 20 years,” he said.