Thursday 13 June 2024

Iraq can double oil output in 10 years: Shell

Baghdad, February 14, 2011

Iraqi oil output will double in the next decade, not quadruple as in initial government targets, but the country could still test Saudi Arabia's influence in Opec, oil major Shell said on Monday.   

In its energy scenarios to 2050, published for the first time since 2008, Royal Dutch/Shell said Iraq was a key uncertainty in the oil supply picture, with output likely to reach 5-6 million barrels per day over the next decade if reasonable stability and security are achieved.

Iraq's previous government had said partnerships with oil and gas companies including Shell could push output to as much as 10-12 million bpd.   

"This would mean annual growth rates of 10-15 percent would have to be sustained for at least 10 years -- a feat unseen in recent history," Shell said.   

Shell said that in the medium term, a balance must be struck between ramping-up production quickly for Iraq to generate income and avoiding over-supply so that Opec can manage its spare capacity buffer adequately.   

"Key to price volatility will be Opec's spare capacity levels, its adherence to agreed quotas to limit production during periods of weak demand and continued market perception of medium to longer-term supply-demand tightness".   

Shell said that since Saudi Arabia has recreated its spare production capacity by bringing new facilities on stream, it will retain Opec leadership and consolidate its international influence.   

"This leadership will be tested if the present Opec spare capacity buffer lasts well into this decade. It will depend on the pace of uptake of Iraqi oil production and the competitive response of other Opec members in maintaining market share," the oil company said.   

It also said that apart from Iraqi production, the breakthrough in natural gas supply in North America was one of the most important changes for the balances of energy markets in recent years.

"Total potential resources are now thought large enough to meet current consumption levels for about a century. This boom reaches far beyond North American shores. Many other countries are now inspired to search for new gas resources themselves". - Reuters

Tags: Shell | Opec | Iraq | Crude | Oil output |

More Energy, Oil & Gas Stories

calendarCalendar of Events