Study covers period up to 2030
After 18 months of work, Baghdad has finally completed its long awaited Integrated National Energy Strategy (INES), setting out the priorities and objectives for the oil and gas sector, covering the period from 2012 until 2030.
The strategy calls for the investment of $620bn in the sector over the next two decades, with the expectation that this could bring in as much as $6 trillion in revenues, according to a summary of the report.
The study had been expected to be published in April, but has still not been published in its complete form or presented to the Iraqi parliament, according to sources close to the Council of Representatives.
The INES study was developed by the World Bank and US consultants Booz & Company, under the guidance of a government steering committee with representatives from the oil, electricity, planning and finance ministries among others.
The study warns that the next three years will be critical for infrastructure development across upstream and downstream sectors. The priority for now is upstream development with a production target of a minimum of 4.5 million barrels a day (b/d) by the end of 2014.
A secondary objective over the next three years will be a decision on setting Iraq’s long-term oil production targets.
Iraq currently produces around 3.4 million b/d, and the INES sets out three scenarios for future crude oil production; a high case of 13 million b /d by 2017, a medium case of 9 million b/d by 2020 and a low case of 6 million b/d by 2025.
A decision on production levels is not expected until 2015, but the Oil Ministry has already begun the process of scaling back the country’s inflated target plateau production rate of over 12 million b/d. It has so far agreed new terms with Russia’s Lukoil for the West Qurna-2 field and Italy’s Eni for the Zubair field that will reduce output by 875,000 b/d, and eventually lead to a lower overall target of around 9 million b/d.
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