Iraq's Prime Minister proposes OPEC modifies the nation's oil export allocation
Iraq, a country with vast oil reserves, has been making strides in rebuilding and expanding its energy sector. Decades of conflict, sanctions, and infrastructure damage have taken a toll, but recent efforts have focused on revitalising oil production capacity.
Iraq's Prime Minister, Mohammed Shia Al Sudani, has been at the forefront of these efforts, seeking to increase oil production and attract investment in the sector. His comments about expanded quotas came a day before the monthly gathering of the OPEC+ alliance, an international organization that coordinates oil production among its member countries.
The International Energy Agency (IEA) has taken notice of these developments, raising its forecast for oil supply growth this year following the decision by OPEC+ to increase production. Iraq currently produces more than 4 million barrels of oil per day from Baghdad-controlled oilfields.
The Baghdad International Energy Forum provides a platform for Iraq to showcase its potential and attract investment. In line with this, Iraq has opened its oilfields to international companies for development since 2009, with major oil companies such as Exxon Mobil, Royal Dutch Shell, BP, CNPC, and Lukoil participating.
Iraq's oil revenue, which makes up more than 90% of its budget, has benefited from these developments. In August, Iraq's daily oil exports averaged 3.38 million barrels per day, marking an all-time high. The country has also awarded contracts to develop major oil fields and natural gas resources, holding more than half of its 145 billion barrels of proven reserves.
The US government data showed America's crude inventories grew by 2.4 million barrels last week, but this hasn't deterred Iraq's ambitious expansion plans. Iraq has set out an ambitious plan for expansion, including signing memorandums of understanding with Oman's OQ Group for an integrated crude oil storage project and global marketing of Iraqi crude.
However, the IEA has lowered its demand forecast due to lacklustre demand across major economies. This could pose a challenge, but Iraq remains open to receiving oil companies eager to invest in oil and gas, with preferential procedures for major companies according to the country's supreme interests.
In fact, negotiations with international oil companies are ongoing. Somo is in advanced talks with ExxonMobil over a possible agreement for storage capacity in Singapore, as well as potential refining capacity deals and profit-sharing arrangements in Asia. The specific names of the international oil companies involved in these negotiations are not detailed in the available search results, but they generally involve large international oil firms interested in exploration and production contracts in Iraq's energy sector.
Prime Minister Al Sudani has emphasised the need for increased revenue to support reconstruction and services in the country. As Iraq transforms into a thriving industrial and developmental field, with new areas emerging for energy production, it remains to be seen how these developments will shape the country's future.
OPEC+ is expected to consider raising oil production at its meeting on Sunday, a decision that could further boost Iraq's oil sector. With its proven oil reserves enough to sustain global markets for at least 120 years at current rates, Iraq's potential in the global oil market is undeniable.
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