Iraqi Economists Network

شبكة الاقتصاديين العراقيين

Energy, Oil & Gas Policy

Is Iraq’s Oil Industry going to grind to a halt? Comments by Dr. Thamir Uqaili *

This comment refers to a blog by Mason Johnson on the subject mentioned in the title which was republished on the website of Iraqi Economists Network (see link bellow)

The delay in implementing sea water injection is the main problem facing the increase of production from southern fields of Iraq at present. However there are other shortages resulting delays in increasing storage and transportation and export capacities, besides those of gathering, processing and utilisation of the produced associated gas.

Reservoir pressure, hence production rate, would decline in absence of water injection. This is partially resolved in West Qurna-2 contract. The contractor LUKOIL is injecting some 50,000 b/d of water from the Euphrates River:

  • Current production rate is about 400,000 b/d requiring about 500,000 b/d water injection rate.
  • Due to shortage of potable and irrigation water, Ministry of Irrigation has allowed maximum of some 136,000 b/d.
  • Injection rate of (50-136) ,000 b/d would not prevent a decline that would be felt shortly.

The oil sector like other sectors in Iraq is suffering from corruption and inefficient management, besides large deficit in the budgeting and devastating cost of war against IS:


  • With better management of the oil sector, oil production from uncontracted fields can still be made if managed by better ministry handling in paying contractors for drilling, well service and expanding capacities of the Pilot Development of its own fields.


  • Modest production increase of 250,000 – 350,000 b/d from Iraq would not reflect on world price of oil. The contribution from Kurdistan smuggled oil is expected to reach 500-750 thousands b/d in the coming two years. That from Syria, through Turkey, may continue to another year.
  • The price of oil is not likely to recover, at least in the coming two years as bad world economies are likely to stay stagnant amid no growth in world demand. Enough oil seems to be available to meet modest demand if it does take place


Mason Johnson, Rebuilding Iraq, Linkedin, 1. Okt. 2015

(*) Dr. Thamir Uqaili is Iraqi senior oil consultant

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