Wednesday, January 6, 2010

Does al-Shahristani Really Think Six Years?

Many people have reacted to Monday's post with disbelief that such an enormous increase in oil production could happen in only six years. I share that scepticism! However, I wanted to document that Dr al-Shahristani really has been saying this. Here's a sampling of news coverage on the point.

Dec 31st: Iraq says more 'superfields' up for grabs:
Undeterred by the rising spiral of sectarian violence as parliamentary elections loom, Oil Minister Hussain al-Shahristani says Baghdad still has scores of oil fields, including the so-called superfields that contain more than 5 billion barrels, to offer foreign companies.

He believes that the bloodletting, including a recent wave of suicide bombings that killed some 500 people, will not undermine his plans to quadruple Iraq's oil production to 12 million barrels a day in the next six years.

He pointed to the string of recent 20-year drilling deals with two dozen oil majors from around the world.

"The terrorists tried to send a message to the companies through the bombings … that Iraq is unstable and investment will be overshadowed by risks," he told state television a few days ago.

"But this message was not delivered and never deceived them. They came and submitted competitive offers that surprised the global oil industry."

Dec 12th: Iraq oil capacity 'to reach 12m barrels per day'
Iraq's oil capacity could reach 12 million barrels per day (bpd) in six years, the country's oil minister says.
Hussein al-Shahristani told reporters in Baghdad that oil producers would not necessarily operate at full capacity, but would take into account demand.

Dec 12th: Russia's Lukoil wins big in Iraq oil auction
Al-Shahristani said that the contracts awarded over the two days, coupled with those awarded over the past few months — including the June auction — would help the country boost production to 12 million barrels per day in six years. Iraq currently struggles to produce 2.5 million barrels a day.

However, it's worth noting that in a slightly older set of interviews, he was saying 7mbd in (what is now) seven years, and before that it was less and took longer. So apparently his ambitions have been growing over time. For example, Ruba Husari has a very nice interview from July 2008, in which she quotes Dr al-Shahristani thusly:

We expect to increase production by 1.5 million barrels per day within three to four years from the time the contracts are awarded. The ministry has a 10-year plan, according to which Iraq should be producing 4.5 million b/d within five years from the current 2.5 million b/d. We intend to raise our production by 500,000 b/d on our own to reach 3 million b/d until the contracts enter into effect in order to achieve the 4.5 million b/d by 2013. Within 10 years, or by 2017, Iraq’s oil output should reach 6 million b/d.

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