Iraq's Oil Production Highest in 20 Years

Iraq's oil production exceeded 2.6 million barrels per day (Mbpd) for the first time in 20 years, Oil Minister Abdul Kareem al-Luaibi said.

The rising output will boost Iraq's oil exports by 5% to 2 Mbpd next month, said Falah al-Amri, head of the country's State Oil Marketing Organization. The nation sells about 60% of supplies to India, China and other Asian countries.

Iraq, holder of the world's fifth-largest crude reserves, is seeking foreign investors to help boost oil and gas (O&G) production, which was affected by insurgent attacks and a lack of spending. Oil output hovered around 2.4 Mbpd since the 2003 U.S.-led attack that ousted the regime of President Saddam Hussein. The government awarded 12 oil and 3 gas development contracts since then.

Al-Luaibi vowed to speed up the increase in output and development of exploration and drillings in collaboration with international companies operating in the country.

"We will work on rehabilitating energy industry-related infrastructure, including oil and gas pipelines," he said, adding "we will back the foreign energy companies working in Iraq to raise output, exports and storage."

Negotiations were continuing with Royal Dutch Shell Plc and Mitsubishi Corp. on a project to capture associated gas at oil fields in southern Iraq, Al-Luaibi said.

"There is nothing new so far on that," he said.

An agreement with Shell and Mitsubishi is due to be signed by the end of January, Ali Hussain Khudair, the director-general of Iraq's South Gas Co., said on Nov. 25.

The government gave initial approval on June 29 for the creation of a venture with Shell and Mitsubishi, to be called Basra Gas Co. The venture would be owned 51% by state-run South Gas, with Shell holding 44% and Mitsubishi the remaining 5%.