Iraq's oil output to double this decade-IEA

By Alex Lawler

LONDON, Oct 9 (Reuters) - Iraq's oil production is on courseto more than double by 2020, the International Energy Agencysaid, although delays to investment could tighten the globalmarket in coming decades and push prices higher.

In its Iraq Energy Outlook published on Tuesday, theParis-based IEA said Iraq's oil production would reach 6.1million barrels per day (bpd) by the end of this decade underits central scenario.

But that rate would be half of that implied by Iraq'stargets signed with foreign oil companies and the IEA, whichadvises 28 industrialised countries, highlighted the risk ofproduction rising more slowly than expected.

"This report anticipates movement towards possibletrajectories for oil output lower than that implied by currentcontracts," the report from the IEA said.

Iraq's oil production, which stagnated for years due to warsand sanctions, started to rise in earnest in 2010, after Baghdadsecured contracts with companies such as BP Plc , ExxonMobil , Eni and Royal Dutch Shell .

Output has passed 3 million bpd for the first time in threedecades. Iraq earlier this year overtook Iran to become thesecond biggest producer in the Organization of the PetroleumExporting Countries, after Saudi Arabia.

Industry executives say that while Iraq, holder of theworld's fourth-largest oil reserves, has enough oil in theground to hit its target of 12 million bpd, infrastructurebottlenecks, red tape and bureaucracy make that unlikely by acontractual deadline of 2017.

The IEA's report also presented a delayed scenario, in whichenergy investment in Iraq rises only slowly from 2011 levels,leading to oil production of 4 million bpd in 2020 and 5.3million bpd in 2035.

In this case, Iraq would face a $3 trillion loss in nationalwealth due to lower oil export revenues and a failure of otherindustrial and services sectors to develop. Global oil priceswould also be higher.

"These reach almost $140 per barrel in 2035 in real terms,nearly $15 higher than in the Central Scenario," the IEA said.

(Reporting by Alex Lawler; Editing by William Hardy)


Keywords: IEA IRAQ/