Iraq’s 2015 Oil Output Seen Flat, Next Year a Challenge

Iraq’s oil output in 2015 is likely to remain flat as Baghdad struggles to cope with a slump in crude prices that has slashed government revenue and forced the OPEC producer to renegotiate its service contracts with oil majors. A boost in crude production next year will prove to be even more challenging if oil prices remain low and Baghdad fails to repay oil companies or approve field development plans on time, oil executives and market experts say. Industry sources say approvals by Baghdad for tenders to build new crude-processing facilities have already been delayed for up to six months in some of the main southern fields. Baghdad has asked foreign oil companies such as BP, Royal Dutch Shell, ExxonMobil, Eni and Lukoil to revise their oilfield development plans by considering postponing new projects and delaying already committed undertakings. That could lead to slower production than initially anticipated, oil executives say. “The priority now is to maintain steady production. You will not be seeing any incremental increases in 2015 or even 2016,” an oil executive working in southern Iraq told Reuters.
“From where? Certainly not from the south. Who will increase?”