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World Energy Outlook Special Report 2012 – Iraq Energy Outlook

Press Release, The International Energy Agency (IEA)
Iraq’s energy sector holds the key to the country’s future prosperity and can make a major contribution to the stability and security of global energy markets, the International Energy Agency (IEA) says in a special report of the World Energy Outlook released today – the first time that the IEA has conducted a comprehensive review of the energy sector of a major Middle East producer.

The IEA’s Iraq Energy Outlook finds that Iraq makes by far the largest contribution to global oil supply growth over the coming decades, with current production of 3 million barrels per day (mb/d) more than doubling by 2020 and going on to reach more than 8 mb/d by 2035. Iraq becomes a key supplier to fast-growing Asian markets, mainly China, and the world’s second largest oil exporter by the 2030s, overtaking Russia.

“This landmark study confirms the increasing importance of Iraq to the global energy system, highlighting the key role it is expected to play in meeting growing energy needs and the responsibilities it will assume as a strategic source of world oil supply. Put simply, this report shows that we all have an interest in Iraq realising its potential and revitalising its economy,” said IEA Executive Director Maria van der Hoeven.

“Developments in Iraq’s energy sector are critical for the country’s prospects and also for the health of the global economy.” said IEA Chief Economist Fatih Birol, the report’s chief author. “But success is not assured, and failure to achieve the anticipated increase in Iraq’s oil supply would put global oil markets on course for troubled waters.”

Catching up with rising demand for electricity is a critical domestic challenge, as prolonged power cuts are still experienced on a daily basis in many parts of the country. The report estimates that, if planned new capacity is delivered on time, electricity generation will meet Iraq’s demand for power in 2015. Natural gas can play a much more important role in Iraq’s future and a vital first step will be to reduce the amount of gas that is currently flared. Once domestic needs are met, Iraq can also provide a cost-competitive source of gas supply to neighbouring countries, to European markets and to Asia, according to the report.

Meeting the anticipated levels of oil, gas and power supply over the period to 2035 will require over $530 billion in energy investment in Iraq, with the annual investment need highest in the current decade. But Iraq stands to gain much more – almost $5 trillion in revenues from oil export over the same period (an average of $200 billion per year). Revenues of this magnitude can transform Iraq’s future prospects, with the potential to stimulate much-needed economic growth and diversification. To achieve these ambitions, Iraq will need strengthened institutions and human capacity, a stable regulatory framework and sound long-term strategies for the energy sector, and efficient, transparent management of revenues and spending.

The Iraq Energy Outlook has been produced in close co-operation with the federal government of Iraq, the regional and provincial governments and officials across many government bodies, including fact-finding visits by the IEA team to Baghdad, Erbil and Basrah.
(9 October 2012)
Read the full report

IEA sees Iraqi oil output doubling to 6.1 mil b/d in 2020

Iraqi oil output is set to more than double over the rest of the current decade, rising to 6.1 million b/d by 2020 and reaching 8.3 million b/d in 2035, the International Energy Agency said Tuesday in a special report on the Middle East country.

This 5.6 million b/d increase between 2011 and 2035, the central scenario in the report, makes Iraq by far the largest contributor to global oil supply growth, the IEA said, adding that Iraq was expected to account for some 45% of anticipated growth in global output.

The concentration of super-giant fields in the south of the country around Basra will provide the biggest production boost, the IEA said, although it added that substantial growth could also come from the north if the Kurdistan Regional Government and Baghdad resolve their differences over administration of the oil sector.

Boosting output capacity from the current 3 million b/d will require cumulative energy investment of more than $530 billion or more than $25 billion annually — three times the estimated $9 billion spent in 2011 — over the period, the IEA said…
(9 October 2012)

Awaiting the Iraqi oil rush

Masa Serdarevic, FT Alphaville

Over the current decade, Iraq accounts for around 45% of the anticipated growth in global output. Iraq becomes a key supplier to fast-growing Asian markets, mainly China, and by the 2030s Iraq is the second-largest global oil exporter, overtaking Russia.

That’s the main conclusion of the International Energy Agency’s special report on Iraq published on Tuesday…
(10 October 2012)
Read for headline quotes from the report.

Will Iraq’s energy boom postpone peak oil yet again?

Ambrose Evans-Pritchard, The Daily Telegraph
…As a signed-up member of the cheap peak oil club – not quite the same as peak oil – I am watching this with great interests.

As the IEA says, this will require $530 billion of new investment. “The obstacles are formidable: political, logistical, legal, regulatory, financial, lack of security and insufficient skilled labour,” it said.

Good luck to the Iraqis. Let us hope that they – with the help of BP, Shell, Exxon, et al – can pull it off.

They would eclipse Iran and transform the strategic balance of power within the Middle East – hopefully for the better, though one never knows…
(9 October 2012)