Kuna, July 28 – Iraqi Oil Minister Hussein Al-Shahristani met with oil executives to discuss possible joint ventures and a new hydrocarbon law that would regulate the critical energy sector throughout the country.
Al-Shahristani met with US Energy Secretary Samuel Bodman on Wednesday in a day of meetings at the US Energy Department that included representatives from oil companies such as ExxonMobil, Chevron, ConocoPhillips, Marathon, BP and Shell Oil.
Speaking to reporters after the meetings, Al-Shahristani said that oil company representatives offered their advice and assistance for plans on a hydrocarbon law that will be introduced to the Iraqi Parliament for voting at the end of this year. The law has been touted by Bodman as a way for Iraq to attract 20 billion dollars in foreign investment that is needed to increase Iraqi oil production. Moreover, the hydrocarbon law is expected to impact the worlds oil market by improving confidence in Iraqs energy sector. Although Al-Shahristani told reporters that Iraq has not negotiated joint ventures with companies to begin work in specific oil fields, he said that some contracts could be signed before the hydrocarbon law is voted on by parliament.
The Department of Energy has said that the Iraqi Oil Ministry makes its decisions independent of the United States, but aside from helping Iraq draft the hydrocarbon law the Department said in a statement that it provides technical experts and will be pursuing joint projects with the Iraqi energy ministry. Bodman was in Iraq last week where he met with Al-Shahristani and Iraqi Prime Minister Nouri Al-Maliki, who delivered an address to Congress earlier in the day and met with US President George W. Bush at the White House Tuesday. Al-Maliki and Bush announced that more Iraqi and US forces would be relocated to Baghdad from other parts of the country to boost security in the city.
Oil is seen as a critical way to boost economic development in Iraq and help finance the cost of rebuilding the country from continued attacks. But the cost of security for investors can amount to over fifty percent of the cost of a project, according to the US Special Inspector General for Iraq Reconstruction Office. There have been over 300 attacks on Iraqi oil fields in the last three years, according to Iraqi government figures.
Iraq, which is currently producing 1.9 million barrels of oil per day, hopes to boost production to three million barrels per day by the end of the year, said Al-Shahristani.
The oil minister ambitiously projected that Iraq could produce up to 4.5 million barrels per day in the next five years and that it could be the second largest producer of oil in fifteen years.
Bodman characterized such figures as "ambitious." The US Energy Department estimated that at its current output, Iraq is still far under its pre-war oil production level of 2.6 million barrels per day.
According to Iraqi oil ministry, Iraq has suffered over 11 billion dollars in losses due to theft, sabotage of the oil infrastructure, security concerns and corruption.