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Iraq Should Be In No Hurry to Reach 6 Million Barrels per Day Output

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An International Energy Agency study, released on October 9th, 2012, estimates that Iraqi oil production may reach 6 million barrels per day (mbd) by 2020 from its current output of 3mbd. This estimate is largely based on the statements of Iraqi politicians, who see oil revenues as the principal means of solving Iraq’s deep economic and social issues.


On the surface, this approach would seem like common sense, but does it hold up to closer scrutiny? Hanging Iraq’s future prospects on a 6mbd output holds considerable dangers. In the first place, as is often said, geography is not on Iraq’s side. There is limited scope for expanding port capacity into the Persian Gulf, and Iraq’s pipelines are old and leaky. Doubling oil exports will mean building new pipelines, which must pass through neighbouring states – not all of which will look on expanding Iraqi oil production with favour. It may be that these states will impose rents and conditions that will become prohibitive. In short, taking the oil out of the ground is one thing, getting it to foreign markets is quite another.


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