Oil output in Iraq could more than double to 6.1 million barrels a day by 2020 and could climb as high as 8.3 million barrels a day by 2035, according to a report released Tuesday by the International Energy Agency.
The boost in oil production would make Iraq the largest contributor to growth in the global oil supply, accounting for 45 percent of new supplies. By the 2030s, Iraq is likely to overtake Russia and become the world’s second-largest oil exporter, the report said.
The IEA said Iraq has contracts to produce even more than that, 9 million barrels a day by 2020, but that investment would be constrained by political strife, inadequate infrastructure and a shortage of skilled personnel.
The study warned that Iraq’s failure to expand its production could add $15 a barrel to world crude oil prices for years to come.
IEA chief economist Fatih Birol said part of the purpose of the report was “to show the Iraqis and the rest of the world the consequences of the failure of Iraq to increase production. It is not only a question of Iraq and its 30 million inhabitants . . . but to show the world what it means for Iraq to be failing.”
The IEA said Iraq could earn $200 billion a year from its oil exports over the next two decades, vastly improving living standards.
The biggest increase in production is likely to come from known super-giant fields in the south near Basra, the IEA said. Substantial amounts of new production also could be developed in Kurdistan, where the regional government has awarded contracts for new exploration.
“Resources are not an issue,” Birol said. Production costs run about $1.50 a barrel in Iraq’s older giant fields, he said, while there was practically no exploration “for years and years” before the fall of Saddam Hussein in 2003.
“Success in developing Iraq’s hydrocarbon potential and effective management of the resulting revenues can fuel Iraq’s social and economic development,” the IEA report said. “Failure will hinder Iraq’s recovery and put global energy markets on course for troubled waters.”