| 7/18/2006 MondayMorning.com | ||
But the lack of a clear development strategy for Iraq’s oil resources is delaying the much-needed foreign investment required to reach this level of production, Micael Gulbenkian indicated in an interview with Portugal’s Lusa news agency. “Iraq has gigantic potential”, said Gulbenkian, whose company has projects in the war-torn country. “The Iraqi economy is a failure. The country doesn’t have the means to develop and explore its national resources”. The Iraqi authorities are torn between a policy which would seek to keep the development of the country’s oil resources in national hands and a policy of openness to foreign investment in the sector, he noted. Iraq expects its daily oil production to reach 6.0 million barrels per day by 2012, Iraq’s Oil Minister Hussein Shahristani said last month, adding that Iraq’s highest oil production was now 3.5 million barrels a day. Production was about 2.5 million dollars a day when President Saddam Hussein was deposed in 2003. It then collapsed to virtually nothing and has been slow to rebuild because of insurgent attacks and other problems. Heritage Oil, based in Canada, has a development property in Russia, a producing property in Oman, exploration projects in Uganda and has entered into projects in Kurdistan, Iraq. Gulbenkian was in Lisbon to take part in a course on oil management offered to 46 Iraqis which is sponsored by Heritage Oil and Portuguese oil and gas company Galp. Oil refinery planned for Iraqi Kurdistan Iraqi Kurdistan will soon have its own oil refinery with a capacity of 250,000 barrels per day from newly discovered oil fields, the Lebanese company chosen to implement the project said last week. A memorandum of understanding was signed between Ashti Horami, Kurdish minister of natural resources, and Lebanon’s Make Oil AG to build the refinery over the next two years. “There is an agreement with the Kurdish Regional Government, and we will announce the full details in a week”, company director Ahmed Khair al-Din told reporters by phone from the company offices in Beirut. Make Oil, which was registered in Lebanon in 1995, is already in the process of constructing a cement plant in the northern Kurdish town of Dohuk, near the Turkish border. The accord comes following the April announcement of the discovery of an oil field in the Zakho region of Kurdistan near the Turkish border -- the first in the Kurdish Autonomous Region. The field is expected to produce 20,000 barrels per day by next year, with a view to increasing output to 200,000 barrels per day by 2008. Kurdistan has proven reserves of some 3.6 billion barrels, less than 3.0 percent of Iraq’s total, though the Kurdish government has estimated that reserves could be as high as 45 billion barrels. Though Kurdistan is safer than the rest of the country, perceived security risks have kept down interest from major international oil companies, leaving exploration to smaller outfits. Investors are also hesitant because the legal investment framework for the Kurdish region’s oil is not clear. Oil exploration in the rest of the country must go through the Oil Ministry, and the constitution specifies that all Iraq’s oil belongs to all its people. The Kurdish regional government maintains that it has the authority to pursue its own agreements. |
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