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Iraq to ensure oil price stability
By Sinan Salaheddin |
September 16, 2010, Thursday
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IRAQ'S oil minister said yesterday his country would work with OPEC to ensure oil price stability, even as he stressed new production from Iraq's vast fields would help meet growing oil demand in the future.
Iraq's push to ramp up production to a projected 12 million barrels per day by 2017 has stoked worries among fellow members of the Organization of the Petroleum Exporting Countries that the new output would flood the market, driving prices lower as the 12-nation producer bloc seeks to keep oil at about US$75 per barrel.
Hussain al-Shahristani said Iraq's 115 billion barrels of proven conventional crude reserves "can meet the need for oil for tens of years, with an average of 10 million barrels a day" in production. He was speaking during celebrations marking the 50th anniversary of OPEC's founding in Baghdad.
Al-Shahristani said that while Iraq desperately needed oil revenue to rebuild its battered economy, the country was "determined to support OPEC in achieving its goal of stability in oil prices."
Iraq relies on oil revenues for 95 percent of its revenue.
Last year, Iraq awarded 12 oil contracts to international oil companies that have pledged to boost output capacity to 12 million barrels per day by 2017.
That would put Iraq's output just shy of Saudi Arabia's current production capacity.
Iraq currently produces 2.4 million barrels per day, far below its potential.
Last month, al-Shahristani said Baghdad would consider abiding by OPEC quotas once its crude production hits 3.5 million to 4 million barrels a day in two to three years. Analysts have said that Iraq's new output - even at a fraction of what the country is hoping for - could seriously squeeze prices.
At the group's birthday celebrations in Vienna, OPEC's secretary general said the bloc was satisfied with prices at current levels, but noted that the group must also be ready to adapt to changes in the market.
One shift for the group over the past 50 years has been a greater focus on Asia, with demand for oil rising sharply over the past few years in China and India.
Falah al-Amiri, the head of the state oil marketing organization said Iraq is considering increasing its oil exports to Asian emerging markets in the coming years. He said about 55 percent of Iraq's oil exports now go to the Asian markets.
Iraq's push to ramp up production to a projected 12 million barrels per day by 2017 has stoked worries among fellow members of the Organization of the Petroleum Exporting Countries that the new output would flood the market, driving prices lower as the 12-nation producer bloc seeks to keep oil at about US$75 per barrel.
Hussain al-Shahristani said Iraq's 115 billion barrels of proven conventional crude reserves "can meet the need for oil for tens of years, with an average of 10 million barrels a day" in production. He was speaking during celebrations marking the 50th anniversary of OPEC's founding in Baghdad.
Al-Shahristani said that while Iraq desperately needed oil revenue to rebuild its battered economy, the country was "determined to support OPEC in achieving its goal of stability in oil prices."
Iraq relies on oil revenues for 95 percent of its revenue.
Last year, Iraq awarded 12 oil contracts to international oil companies that have pledged to boost output capacity to 12 million barrels per day by 2017.
That would put Iraq's output just shy of Saudi Arabia's current production capacity.
Iraq currently produces 2.4 million barrels per day, far below its potential.
Last month, al-Shahristani said Baghdad would consider abiding by OPEC quotas once its crude production hits 3.5 million to 4 million barrels a day in two to three years. Analysts have said that Iraq's new output - even at a fraction of what the country is hoping for - could seriously squeeze prices.
At the group's birthday celebrations in Vienna, OPEC's secretary general said the bloc was satisfied with prices at current levels, but noted that the group must also be ready to adapt to changes in the market.
One shift for the group over the past 50 years has been a greater focus on Asia, with demand for oil rising sharply over the past few years in China and India.
Falah al-Amiri, the head of the state oil marketing organization said Iraq is considering increasing its oil exports to Asian emerging markets in the coming years. He said about 55 percent of Iraq's oil exports now go to the Asian markets.
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