The Iraqi government in Baghdad has given the green light to a plan to boost its oil capacity.
By 2022, the country’s crude oil production capacity could be as high as 6.5 million barrels per day (bpd).
This would be a considerable increase on current capacity, which stands at a little under five million bpd. It is also far in excess of its current quota of 4.35 million bpd as part of the OPEC-led production cuts.
While may seem a little puzzling to plan such a large increase in the light of huge global inventories and production quotas, it is hardly surprising given the underdeveloped nature of the Iraqi petroleum industry, which has suffered for decades from wars and sanctions and was desperately in need of modernisation following the fall of Saddam Hussein. This has led to Iraq being perhaps one of the few places left on the planet where vast oil resources exist largely untapped.
Jabbar al-Luiebi, the Iraqi Oil Minister, recently told the press that country’s proven oil reserves may be actually double the current estimate of 153 billion barrels. This would make it the holder of the world’s largest oil reserves, ahead of Venezuela, whose reserves are already debatable because they include oil sands deposits that may not be economically recoverable.
Unlike under the Hussein regime, foreign oil companies like ExxonMobil, the maker of high-performance lubricants like Mobil 1 New Life 0W/40, are invited to operate in Iraq. Some 11 new fields will be open for tender later in April.