Middle East Times reported on July 31 that Iraq’s oil minister Hussein Al Shahristani said Wednesday that boosting foreign investment is vital to increasing the country’s oil output as he met in Washington with executives from major energy groups.
Shahristani voiced optimism during a press conference at the US Energy Department that foreign companies would help modernize Iraq’s oil facilities, which have been regularly targeted by insurgents since the 2003 US invasion.
"Iraq’s vast oil and gas reserves are waiting to be developed," the oil minister said as he stood next to US energy secretary Samuel Bodman.
"We are increasing production … but to develop that potential Iraq will require partnership with international oil companies and we had an opportunity this afternoon to meet some of the members of this industry," Shahristani said.
He said no specific agreements had been made during the talks, but that the US and European oil company executives had expressed interest in Iraq’s huge and largely untapped oil sector.
Shahristani said he briefed the executives, including representatives of ExxonMobil, Royal Dutch Shell, Chevron, ConocoPhillips, BP, the Marathon Oil Company, Occidental Petroleum, Amerada Hess and Anadarko Petroleum, on a potential new hydrocarbon law.
The law, which has yet to be approved by Iraq’s parliament, would allow foreign companies to invest in the war-ravaged state and its rich oil fields. "We hope it can be enacted before the end of the year," Shahristani said of the law.
The US government has lobbied hard for the law to be passed and Bodman urged its approval during a trip to Iraq earlier this month.
There was no foreign investment in Iraq’s oil sector under the rule of former dictator, Saddam Hussein, but in his final years in power a French-Russian joint venture was signed though never implemented due to United Nations sanctions.
Iraq’s oil output touched 2.08 million barrels per day in June, the highest since October 2004, and exports reached 1.64 million barrels per day.
Shahristani voiced hope, however, that this output could double by 2009 or 2010. "We hope to reach three million barrels a day by the end of this year and anywhere between four and four-and-a-half million barrels per day in three to four years time," he said.
He said the oil ministry had not signed any contract negotiations with foreign oil groups as yet, but that "many of the companies have indicated their interest in joint venture with national Iraqi oil companies to develop fields."
Further discussions with the US and European energy players are likely in coming months, he indicated. "This partnership I think can be very useful," Shahristani said, noting that Iraq’s damaged oil industry "has been cut off from the rest of the world for a couple of decades."
He added that he believes Iraq could become the world’s second largest oil producer in the next couple of years "and perhaps the largest producer of crude oil in 10-15 years time despite what the country’s going through now."
The minister, who was joined by Iraq’s electricity minister Karim Wahid Al Hasan at the news conference, was in Washington as part of Iraqi Prime Minister Nuri Al Maliki’s delegation.