Iraq oil may rival Saudi in 20 years, group says

ISTANBUL - Hürriyet Daily News

(From left to rigt) Director of Atlantic Council's Istanbul Office Orhan Taner, the International Energy Agency (IEA) Chief Economist Fatih Birol, former American ambassador to Azerbaijan Matt Bryza, Director General, Multilateral Economic Affairs, Turkish Foreign Ministry Rende and Turkey-Iraq Business Council President Ercüment Aksoy attends a meeting to announce latest report of IEA. Iraq ‘s oil output is expected to increase substantialy in coming years, according to the agency. DAILY NEWS

Iraq’s oil output could double in two decades, making Iraq’s economy as large as Saudi Arabia’s in 20 years’ time, according a recent report published by the International Energy Agency.

“In the next 20 years 45 percent of the oil growth in the world will be coming from Iraq, and Iraq’s annual oil revenue, which was 100 billion dollars in 2011, could double to an average of $200 billion annually over the next 20 years,” IEA Chief Economist Fatih Birol said, speaking at a conference organized by Atlantic Council and the Foreign Economic Relations Board (DEİK) in İstanbul. The IEA is a policy adviser to 28 member countries, mostly industrialized oil consumers.

A new, modern and prosperous country is set to emerge in the Middle East due to oil and gas revenues, Birol said, referring to the future of Iraq. “Turkey should follow this process closely, because it will have a very rich neighbor in the near future.”

Export projection

The leading global energy monitor reported that Iraq’s oil exports are projected to grow from their current 3 million barrels a day to 6.1 million barrels per day in 2020, and 8.3 million barrels a day in 2035. Iraq is already the world’s third-largest oil exporter. But the report also said Iraq needed to sort out internal issues in order for its predictions to come true. Disputes between Iraq’s central government and the Kurdistan Regional Government (KRG) over oil contracts must be resolved. Among the most troublesome of these are contracts awarded by the Kurdistan regional authorities for access to the rich oil fields of northern Iraq.

Increased oil production in Iraq is also crucial for international markets, Birol said. “Iraq by far makes the largest contribution to global oil production growth. If Iraqi production grows very slowly, this would put upward pressure on prices,” he said.

Turkey can play a crucial role in carrying Iraq’s oil and gas resources to the world market, Director General, Multilateral Economic Affairs, Turkish Foreign Ministry, Mithat Rende said.

“In order to be a major player, first [Iraq must] establish confidence, peace and security in their country; they should be at peace with their own people and their neighbors,” Rende said.