Skip to main content

GlobalData: Iraq’s policies to support oil and gas development appear stalled

Published by
Oilfield Technology,

Iraq’s crude-oil production is gradually increasing thanks to expansion at previously delayed oil projects. However, the existing contracts are still not able to reach their full potential, according to GlobalData.

The company’s report: ‘New Iraqi Government Faces Policy Hurdles to Unlock Long-Term Growth’ reveals that Iraq’s crude-oil and condensate production is gradually expanding and is forecast to reach 6 million bpd in 2021. In particular, between 2017 and 2021, Zubair will more than double its daily production. Whilst exciting contacts are stagnant, it appears that the terms for the new contracts, the ones used for Iraq’s fifth licensing round, are not sufficiently attractive to get major investments in the country.

Alessandro Bacci, Oil and Gas Analyst at GlobalData, comments: “The contract model offered in the fifth licensing round exhibits very high levels of state take, even compared to other areas in the region. While earlier contracts also had tough terms, the existing resources of the major fields on offer counterbalanced this, but new opportunities are now likely to be smaller fields or exploration acreage.”

At the same time, Iraq aims to increase the volume of natural gas production as feedstock for its power plants. In support of this aim the government published a roadmap at the end of 2017 containing several specific provisions linked to natural gas development. However, policies to support development of gas resources also appear stalled.

Political instability is also still a major risk. Oil-producing provinces continue to protest that they are not adequately compensated for their oil production with little revenue reinvested locally while they have to bear relevant environmental damage.

Bacci adds: “The tensions between the federal government and the Kurdistan Regional Government (KRG) are far from being solved and, one year after the failed KRG independence referendum, they might resurface again once the formation of the new federal government is complete.”

Read the article online at:

You might also like

Professor Andrew Woods reports on oil & gas industry safety risks

A report on the safety risk of working in confined spaces, developed by Professor Andrew Woods of the BP Institute at Cambridge University, indicates that many organisations in the oil & gas industries have been operating below the generally tolerable levels of safety risk.


Embed article link: (copy the HTML code below):


This article has been tagged under the following:

Upstream news Oil & gas news