Summarized Final Report of the Iraq’s Integrated National Energy Strategy

Introduction

This report presents the recommendations achieved by the Integrated National Energy Strategy (INES) for Iraq. It describes the current challenges facing Iraq’s energy sector and the opportunities presented by Iraq’s energy resources.    It defines a vision and a set of national policy objectives for Iraq’s energy future.   It then lays out a long-term plan of policy commitments, infrastructure development, and institutional reform designed to achieve that vision.

The scope of INES includes all the major components of Iraq’s energy sector: upstream and downstream oil, natural gas, power, and linked industries. The recommendations presented reflect the economic interdependency of these components and their collective impact on Iraq’s socio-economic and environmental welfare.  It covers a time span extending from the present to
2030.

The INES has been developed over the past 18 months by Booz & Company under the guidance of a steering committee of Iraqi government officials established by the PMAC, representing the Ministries of Oil, Electricity, Planning, Finance, Mining and Industry, and Environment. This steering committee has held more than 40 workshops to review data and recommendations, and has played the lead role in setting the direction of the report, identifying areas for analysis, reviewing and modifying data and assumptions, and making policy choices.

The information used in developing the INES was gathered through extensive interaction with Iraqi government ministries. This interaction involved an iterative process of collecting, reconciling, and updating historical and current data.   These data sources have been supplemented by more than 150 interviews with government officials in the Iraq federal government, with officials in Iraqi State-Owned Enterprises, with executives of international oil companies and oil service companies involved in Iraq, and with numerous technical consultants engaged in Iraq’s development plans.  Although nearly all the official data made available pertains to activities managed by the federal Government of Iraq, interviews conducted with several  senior  officials  of  the  Iraq  Federal  Region  of  Kurdistan  provided  insight  into  that region’s policies and plans as well.

The study has been conducted in five phases.

Phase 1 consisted of planning: developing a detailed project plan, detailing data requirements, identifying interview subjects, scheduling interviews, and agreeing on mechanisms for information collection, verification, and management.

Phase 2 consisted of base-lining: developing a comprehensive understanding of the current conditions of each subsector within the energy sector, identifying the principal challenges and strategic choices facing each subsector, and framing those challenges in the context of Iraq’s socio-economic and environmental circumstances.

Phase 3 consisted of formulating the strategy: defining a vision and strategic evaluation framework, identifying broad strategic choices, and selecting an overall strategic design.

Phase 4 consisted of detailing the strategy: developing integrated infrastructure priorities, specifying the scope, timing, and sequence of investments, allocating resources to uses, and identifying the institutional reforms needed to effect these plans.

Phase 5 consisted of finalizing the report: preparing final documentation, reviewing conclusions with the PMAC and with Iraq Ministries, and clarifying recommendations.

Iraq is endowed with one of the world’s richest supplies of oil and gas.  Properly developed, this endowment can be the foundation of a diverse, productive, and continually growing economy.  In order to realize this potential, Iraq needs strategic clarity in two areas.  The first area is economic, involving resource allocation and capital investments. The second is institutional, involving accountabilities, capabilities, governance, and industry structure.

Because multiple institutions must work together to accomplish the purposes of an integrated energy strategy, a clear economic roadmap is needed that sets a shared agenda.  Because that agenda can be accomplished only through effective management of a large number of complex, interconnected tasks, strong institutional roles and capabilities also are needed.   The INES recognizes this dual need for economic and institutional direction, and provides recommendations in both areas
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