US analysts expect Iraq’s oil production to increase by 530,000 bpd in 2013

Oil&Gas Materials 24 October 2012 17:15 (UTC +04:00)

Azerbaijan, Baku, Oct. 23 / Trend A.Badalova /

Iraq's oil production will increase to 3.5 million barrels per day (bpd) in 2013 compared to 2.97 million bpd in 2012, the analysts of the large U.S. bank JP Morgan predict.

According to the analysts' Global Commodities Research, however the risks for these forecast remain in the disputes between the central Iraqi government and Iraqi Kurdish autonomy reemerge.

The Iraqi central government and the Kurdish autonomy reached an agreement on oil payments. According to it, Baghdad will repay all the debts for the oil export to the autonomy and will pay for the work of foreign companies in the autonomy. The Kurdish side will continue supplying oil to the central government, stopped four months ago.

According to JP Morgan analysts, while the agreement between the Iraqi Kurdish autonomy and the central Iraqi government on payment terms and production rates adds clarity to the initial deal between the entities in September, independent oil sales out of Iraqi Kurdish autonomy may increase tensions between the two parties in the future.

Relations between the Kurdish administration in northern Iraq and Baghdad deteriorated in October 2011 after US-based Exxon Mobil received permission from the Kurdish authorities on the exploration and production of oil in this Iraqi region. Baghdad considered the deal illegal and warned the company that if it did not abandon the agreement with the Kurds, its deals with the central Iraqi government may be revised.

According to BP, the Kurdish administration in northern Iraq has oil reserves of 45 billion barrels.

Last month Oil Minister of the autonomy Ashti Hawrami said that oil exports from the Iraqi Kurdish autonomy in October will hit 200,000 barrels per day, and it will rise to 1 million barrels a day by 2015. According to Hawrami, a new oil pipeline with a capacity of 1 million barrels per day will be built in connection with the increase in oil exports between Turkey and Kurdish autonomy. The construction operations are planned to be completed in 2014.