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Iraq makes deals to boost oil and gas production

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The second-biggest producer of oil in OPEC, Iraq, has announced a series of deals aimed at realizing the country’s long-held ambition of scaling up its oil and gas production.

Government officials have said in recent years that oil production in the country could be increased from 4.5 million barrels per day (bpd) to 5, or maybe even 6, million bpd. Iraq is also in the vulnerable position of relying on neighbouring Iran to meet its demand for natural gas, so increased domestic gas production has also been seen as a priority. Nevertheless, amid the background of the COVID-19 pandemic and limited quotas due to the OPEC+ production curbs, little was done to pursue these ambitions.

Despite some oil majors like ExxonMobil, the maker of the Mobil Pegasus gas engine oil, leaving Iraq for cheaper projects that can be turned around faster, Iraq has attracted two Chinese companies and an Emirati one to sign deals that will help the country produce an extra 800 million cubic feet of gas and 250,000 more barrels of crude oil each day.

In a statement, Mohammed Al-Sudani, Iraq’s Prime Minister, said about the decision to increase gas production:

“We have decided to enter the global gas market and we will push ahead with projects to develop our gas resources and stop gas flaring because shortages in domestic gas supply are the main cause of our electricity supply problems.”

Thanks to the new deals, Iraq could potentially become self-sufficient for natural gas in three years.

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