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Iraq Aiming to Produce 6m Bpd Within Three Years - Oil Ministry

Posted on: Sunday, 18 December 2005, 09:00 CST

Text of interview with the Iraqi Oil Ministry's Marketing Director Shamkhi, by Ghazi al-Munshidawi; no date or place given; published by Iraqi newspaper Al-Furat on 11 December

News reports that the Oil Ministry has discovered a number of oil fields, such as the Al-Kifil, Ahmadi, Al-Najaf and Al-Samawah fields, are being circulated. In order to cast light on the importance of these fields, the role of the ministry in their discovery, the current oil production level, and the impact of insurgency on Iraq's oil production, we met Shamkhi, director of the Oil Ministry's Marketing Affairs Directorate. Following is the full text of the interview:

[Al-Munshidawi] How many new oil fields have been discovered by the Oil Ministry recently?

[Shamkhi] Although 80 oil fields have been discovered, only 17 oil fields, which constitute less than 20 per cent of the discovered fields, are currently being exploited. Oil fields are of two kinds, small and large fields. The ministry has set up a plan to develop 11 large oil fields to increase Iraq's oil production to 6m barrels per day [bpd] within the coming three years. According to the plan, the development of these 11 fields will increase Iraq's oil production by 2.5-3m bpd in 2007. He explained that the ministry will begin negotiations and take the necessary decisions to implement its development plan in 2006. He added that oil production will be increased even before the completion of the development plan, due to the concept of accelerated production that allows the ministry to increase its production within a two-year period. In addition, small fields will supplement the production of large oil fields.

New discoveries

[Al-Munshidawi] News reports about the discovery of new oil fields in Al-Samawah and Al-Najaf Governorates have been circulated recently. What is your comment? What is the role of the Oil Ministry in these discoveries?

[Shamkhi] The fields discovered recently are small fields, such as Al-Kifil field, whose production capacity is estimated at 40,000 bpd. This particular field is an extension of the Al-Najaf field, whose reserve is described as moderate. The capacity of these fields is estimated between 40,000-60,000 bpd if they are exploited. Regarding Ahmadi field, I have not heard of it. It could be a small and an unexploited oil field. Regarding the Al-Samawah fields, they are oil depots but they have not been evaluated yet. The difference between an oil depot and an oil field is that the quantity and quality of oil in depots and their production capacity, unlike oil fields, are neither estimated nor evaluated.

The ministry and the oil minister have played an important and significant role in the discovery of these fields through their close follow-up and support since the early stages of the work. He [presumably the oil minister] indicated that although four oil wells have already been dug in Al-Kifil field, more wells need to be dug in order to accurately estimate the field's production capacity and its oil reserve.

[Al-Munshidawi] What are the appropriate methods to develop this field? Will the development of this field contribute to Iraq's crude oil reserve and production?

[Shamkhi] The development of this field requires various requirements and extensive efforts, such as the construction of new pipelines that have to be connected with the existing pipeline network. Al-Najaf Refinery is carrying out this task currently. The development of Al-Kifil field is important because it is a field that is ready and is situated in a safe area.

"Most important" oil fields

[Al-Munshidawi] What are the most important existing fields?

[Shamkhi] The most important fields are the Western Al-Qurnah, Al- Ahdab, Majnun, Bin-Umar, Halfayah, Al-Nasiriah, Al-Rafidayn, Al- Gharraf, Al-Amarah, Shaykh Muqdad and Tuba. As I mentioned above, we have approximately 80 discovered oil fields but they are still unexploited yet.

[Al-Munshidawi] What is the situation of Iraqi oil reserves?

[Shamkhi] The Iraqi oil reserves are categorized into two categories: confirmed reserves, which are situated in the northern as well as southern Iraq and, unconfirmed reserves that are distributed all over the country. Apart from the existing oil depots, the Iraqi territories have not been fully surveyed yet. Thus, Iraq possesses a large oil wealth.

[Al-Munshidawi] Have the new oil fields been discovered by Iraqi or by foreign companies?

[Shamkhi] Some fields were discovered approximately 30 years ago while others have been discovered recently by Iraqi efforts. In addition, some fields, which were discovered by foreign companies that have already left Iraq, have not been developed. Accordingly, they were abandoned and their oil wells were blocked.

The former regime's erroneous policies and wars, in addition to the embargo imposed on Iraq hindered the development of the Iraqi oil sector and industry. The former regime did not take any step to develop Iraq's oil sector. As a result, it deprived Iraq of benefiting from the high oil prices in the international market.

Iraq has currently huge oil reserves that are still unexploited. Accordingly, the Iraqi government and Oil Ministry should invest extraordinary efforts to develop Iraq's oil sector, as Iraq's economic growth depends largely on the oil wealth. The development of oil sector will lead to the development of other sectors in the country because it provides the required funds and investments. It also ensures the flow and consistency of budgets and, development plans, and Iraq's active relations with the rest of the world. Iraq will have significant influence on the cost of energy and consequently on the international policies and oil market.

[Al-Munshidawi] Where are the locations of the important existing oil fields? Will Iraq be able to restore its previous production levels?

[Shamkhi] The number of important fields is 13, which are all situated in southern Iraq. In addition, a number of fields are situated in central Iraq, including the Eastern Baghdad Field in Baghdad and Al-Ahdab Field in Al-Kut. However, most of the newly- discovered large oil fields that will have significant impact on Iraq's production are located in Al-Nasiriyah, Al-Amarah and Basra Governorates. Most of Iraq's oil production is concentrated in the southern Iraq.

With regard to northern Iraq, the major productive oil field is the Kirkuk Oil Field, however, its reserve is not that large and its production is influenced by several factors. The field's current production is only 350,000 bpd and its maximum production under normal conditions is between 600,000-700,000 bpd. It will return to its normal production as soon as security is restored and its development projects are implemented.

[Al-Munshidawi] Does the ministry have plans to discover new fields? Where?

[Shamkhi] Yes, the ministry has a plan to survey the entire country. Companies have been invited to carry out exploration projects in several regions. However, the work on these projects is being delayed due to the current deteriorating security situation and incapability to construct sufficient seismological roads

Impact of security situation

[Al-Munshidawi] What is the normal level of Iraq's oil production?

[Shamkhi] The normal production level is approximately 6m bpd. Our ambition is to reach this level. However, our current production is between 2.4 and 2.5m bpd. We hope to increase our production by additional 200,000 bpd next year.

[Al-Munshidawi] What is the impact of armed operations on the oil production?

[Shamkhi] The armed operations in northern Iraq are hindering the work of the ministry. The oil pipeline linking Kirkuk and Bayji is frequently attacked, a matter that results in the stoppage of oil exports, as well as the supply of crude oil to the northern refineries. This has direct impact on the oil production from the Kirkuk oil field.

In addition, the deteriorating security situation has encouraged some tribes in southern Iraq to extort the South Oil Company under the context of providing protection to nearby oil pipelines, despite the agreements between the company and these tribes, according to which the company is hiring guards to protect the oil pipelines. Nevertheless, the security situation in southern Iraq is generally better than in northern Iraq, thus, Iraq is currently depending on the southern region for its oil production.

[Al-Munshidawi] Do you wish to make any other statement?

[Shamkhi] I would like to thank Al-Furat newspaper for its efforts and through which I would like to call on Iraqi people to fully cooperate with the Oil Ministry to protect their oil wealth because it is their wealth. In addition, it ensures their future as well as Iraq's future. It is a consignment in their custody.

Source: BBC Monitoring Middle East

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