No Major Iraq Crude Oil Output Increase in Next Five Years: IEA
Ayesha Rascoe and
Roberta Rampton (Reuters)
2 July 2009
WASHINGTON - Iraq faces regulatory,
administrative and political barriers that will prevent it from major
oil production expansion for at least five years, David Fyfe, the head
of the International Energy Agency’s Oil Industry and Markets Division,
said on Tuesday.
on Tuesday launched its first major energy auction since the 2003-led
invasion, aimed at ramping up the nation’s oil production.
cautioned that the rules governing oil deals reached in Iraq are not
stable and that legislative red tape may hinder development.
took a very conservative view with regard to Iraq, not because of any
misgivings about physical (resources), because I think everyone accepts
that the resources are there,” Fyfe said. “We were just struggling to
see in the short term a regulatory framework that was going to bring
substantial new volume of oil on stream quickly.”
at an event presenting the mid-term oil outlook by the energy adviser
to 28 developed countries, Fyfe said once those structural barriers are
overcome Iraq will be able to produce six million barrels of oil per
day, but that will not happen in five years.
at the event sponsored by the Center for Strategic and Studies, IEA
executive director Nobuo Tanaka said increased oil production would do
little counter rising oil prices.
that a potential economic turnaround could lift flagging oil demand has
sent crude up from below $40 a barrel in February to over $70 a barrel
this week. On Tuesday, prices dropped more than 3 per cent, below the
$70 mark after grim US consumer confidence data.
this (price spike) cannot be simply solved by more production, because
it is much more dependent on expectation of the economic recovery,” he
said speculation is amplifying oil price volatility, but he still urged
the Organisation of the Petroleum Exporting Countries to be mindful of
what is happening in the market and to act quickly if more production
oil prices have been climbing, they are still far below their peak near
$150 a barrel in July last year. The fall in prices has caused some
companies to scale back on investments.
particular, Tanaka expressed concern about the development of
unconventional sources of oil and natural gas, including oil shale and
Canadian oil sands, but he added that many oil fields could be
developed at current prices.