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Page added on June 20, 2012
Iraq oil hopes slide on legal limbo
LONDON // Five years after the first attempt by the Iraqi authorities to ratify anoil law, the country’s petroleum sector is still in legal limbo.
A hydrocarbon law remains a mirage in Baghdad and the reality is dawning that Iraq’s plans to become one of the world’s top-five oil producers are jeopardised by the legal deadlock.
Many oil deals have been signed in the intervening years but the country’s target of pumping 12 million barrels per day (bpd), more than three times the pre-war record and on a par with the Opec powerhouse Saudi Arabia, is still a distant dream.
“For new arrangements to be successful, they have to be in line with the new law that will be ratified … which is still not ratified,” said Rowsch Shaways, the Iraqi deputy prime minister. When Iraq ends the stalemate – which stems from a dispute between Baghdad, the federal capital, and Erbil, the seat of power in the semi-autonomous Kurdistan region – it will have effects well beyond the oil industry.
Funding for infrastructure rebuilding, relationships with foreign governments and economic diversification into areas such as petrochemicals and manufacturing will all be affected.
The uncertainty about Iraq’s future legal framework was one of the factors that helped to dampen interest last month at Iraq’s first auction of exploration blocks since the Saddam Hussein era. Only three of 12 blocks found takers.
More at The National
3 Comments on "Iraq oil hopes slide on legal limbo"
dissident on Wed, 20th Jun 2012 11:52 am
Excuses, excuses. There is never going to be 12 million barrels per day extracted from Iraq.
BillT on Wed, 20th Jun 2012 1:20 pm
You are so right, dissident. It is likely to drop as the internal civil wars escalate. Especially since Shiite Muslims, with support from Iran, has control of the oil regions.
DC on Wed, 20th Jun 2012 5:31 pm
Why exactly would the US want its puppet to pump oil at those levels? The US has made it clear its seeks to restrict the amount of oil going to the BRICS, or if they cant do that, make is as expensive as possible. Also, 12mpb would require litterally turning the entire US province of Iraq into one giant refinery and pumping station. Something the well-armed locals with there well-founded hatred of the US would likely oppose in some measure. Lastly, 12mpb would flood the world with oil it doesnt need, depressing the price, and that would be bad for everyone. ALberta Tar-sanders, the Saudis. Sure it would hurt Russia and the Nationalized oil companies that amerika has such intense hatred for, but it would also be a windfall for China, India and other nations as well.
Of course, 12mpb would also require the US to basically pay for all that expensive and complex, fragile infastructure in the 1st place. Why would someone invest 100s of billions to pump a product whose price will deflate the price of the very product your trying to pump? The amerikans seem to think flooding markets with commidites that arent needed is a good business plan now, see Frak gas here at home for more details…