| 2008: Iraqi oil boom awaits security and laws |
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March 2, 2008 Experts confirmed that Iraq has an oil stockpile of more than 100 billion barrels which is a massive amount, enough, if used, to satisfy the growing international demand for energy and reduce the high oil prices, but they say that the current situation will not allow any development in this sector, especially with the security situation and the lack of regulating laws. The Government in Baghdad hopes to raise oil production to six million barrels over the past five or six years ahead, which prompted major oil companies, such as "Shell" and "Chevron" to race to invest in Iraq; however, investments are linked to several other factors, mainly the need to stabilize the security situation, making the appropriate legislations and developing the infrastructure. Therefore, Robert Powell, an expert at the Research Unit "Economist", expects the Iraqi oil sector will not be improved unless foreign investments and expertise return, and even then, the development will be slow and gradual. Powell added that the legal issue is of utmost importance because major oil companies will not spend their money in contracts that may be revoked in future causing them heavy losses. It is noteworthy that the Iraqi parliament has been trying for years to pass an Oil Law in vain, and tumultuous debates have been going on for years around this issue, which leaves the organization of the oil sector a matter of disagreement among the political, ethnic and sectarian parties because each one of the wants to ensure its respective share and determine the revenues distribution. Iraqi Oil Minister, Hussein Al-Shahrastani, says that Iraq had already begun increasing production capacity, after the Government has adopted security strategies helped to protect the installations, through the adaptation of gunmen who used to attack oil pipelines in units to protect them, an experience similar to the "awakening" councils. But Iraq's Deputy Prime Minister, Barham Salih, highlighted another aspect of the problem, saying: "We want to obtain financial returns quickly; we must complete the reconstruction efforts and provide jobs for people, because this is very important and will be reflected on the security environment." |