21 June 2013 09:57 [Source: ICB]
Exports of petrochemicals should be part of the reconstruction plan as they are value-added products
Well-established legal and infrastructure frameworks will help support Iraq's oil and petrochemical exports by ensuring stability and attracting investors, senior figures in the international energy sector said at the Iraq Petroleum 2013 conference on 18 June.
An increase in Iraqi oil production could potentially hike the spare capacity at the disposal of the OPEC nations and change oil pricing dynamics, the speakers said.
David Morrison, chairman of research and consultancy group Wood Mackenzie, said: "Iraq is underexplored, but a highly prospective area." Expanding pipeline capacity is key to increasing Iraqi oil exports, he added.
Exports from Iraq are mainly transported using lengthy pipelines that come under frequent attack, including the Kirkuk-Ceyhan oil pipeline that runs to neighbouring Turkey which was reported to have been bombed in early June by militants.
Despite having the fifth-largest proven oil reserves in the world, Iraq has failed to meet its targets to increase oil production. Iraq's proven oil reserves are estimated at 141bn bbl/day as of 1 January 2013, according to the Oil and Gas Journal. However, average crude oil production was at a mere 3m bbl/day in 2012, although Iraq had surpassed Iran as the second-largest OPEC oil producer at the end of the year, according to the EIA.
On the legal aspect of hiking oil production and exports, Morrison said: "The Iraq Hydrocarbon Law should be finalised." The proposed law has been under review by the Iraqi government since 2008.
Iraq was the world's sixth-largest net exporter of petroleum liquids in 2012, totalling 2.4m bbl/day, with the US and India on par as its largest export markets, according to Lloyd's List Intelligence and the EIA.
Iraq will need to invest in desulphurisation of crude oil refined products to meet stringent regulations in its export markets, Adnan al Janabi, chairman of the oil and gas committee at the federal Iraqi parliament said. Exports of petrochemicals should be part of the plan as they are value-added products, he added. The hydrocarbons derivative industry has a huge potential in building the economy and creating jobs for the rising Iraqi working-age population, said Hans Nijkamp, Shell vice-president and country chairman. In Iraq, the petrochemical sector has the potential to increase the country's overall exports, he added.
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