It has been 13 years long, since US, UK and their allies had made invasion in Iraq. Today, the country stands no more liberated. There are corruptions, security problems, lack of unity and lack of democratic freedom. Iraq has to worry about its future and the fragmentation that may come as a result of failing governments to safeguard the well-being of Iraqis.
Oil industry is considered as the foundation stone of economy of Iraq. Though production has been at its peak recently, due to global oil price slash, revenue has not been adequate for the government.
In the year of 2009, main oilfields of Iraq were taken away by foreign companies. National oil companies received a major economic blow due to that.
Of late, in the year of 2015, average production of oil remained at 3.47-mbd. But, production in the month of December, last year, was 4.13-mbd. Northern oil production was hampered by major security threats due to Daesh.
Expenditure was close to $50 billion by the end of 2015. Drastic decline in crude price has made it difficult for the government to pay the oil companies. Already $50 bln has been paid. Question is how much they still need to pay by 2020?
When it comes to natural gas, Iraq’s production in December 2015 was 2,627 million cubic feet a day (mcfd) but the flared gas is 1,901-mcfd, according to the Ministry’s website.
According to statistics, utilized gas has increased only by 70-mcfd in last 11 years for Iraq. In the Southern zone of Iraq, gas fields are not rehabilitated properly. Inadequate efficient technologies have been always a cause of lack of desired production. In 2010, Basra Gas Company (BGC) was established with Shell and Mitsubishi.
In the mid-2014, Iraqi refiners suffered massive loss as Daesh captured Baiji refinery, which is the largest of the country, producing 290,000 barrels per day. In the battle between Daesh militants and Iraqi forces, immense loss to this refiner took place.
At this moment, rehabilitation of this refinery is the biggest challenge. A refinery in Karbala may come in the picture in 2019. But, even that would not help the damages that have been done already.