Due to the importance of Southern Iraq’s oil field development contracts to the Iraqi economy and the country’s petroleum sector, it has become a political and media topic for speakers and politicians without trying seriously to understand the legal framework, the economic basis, and the oil professional essences of these contracts besides using incorrect and politicized information to throw all kinds of accusations at the contracts.
I am trying in this analysis – as an oil professional with more than 40 years’ experience in the industry – to arrive at the truth in a simplified manner through presenting the realities on the ground in facts and figures pertaining to Southern Iraq field development program since its launch early 2010, surrounded with concerns and skepticism, to the end of 2015 when Iraq surprised the world by adding two million barrels of new oil flowing every day from its southern fields to global markets.
The study addresses some key issues occupying the minds of many people, in and outside Iraq, such as the “cost of the barrel”, the money paid to foreign companies developing the fields, whether capital and operational costs or remuneration fees, and the gross and net revenues to Iraq from the additional oil produced within the license rounds projects.
It summarizes the major economic achievements and other professional, social and environmental benefits of the development program.
The analysis also identifies the obstacles and shortfalls of the program such as low pace of oil storage expansion, delay of water injection project, gas flaring, budget reduction, and government bureaucracy.
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(*) Iraqi Oil Expert and A Member of the Oil Ministry’s Team in the 2009 License Rounds
Copyright Iraqi Economists Network 24th of January 2016