IEA optimistic about future of Iraq oil industry

Associated Press Modified: October 9, 2012 at 6:45 am •  Published: October 9, 2012
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The International Energy Agency predicted Tuesday that Iraq will consolidate its position as a global oil power — allowing it to rebuild the economy of a nation ravaged by war and decades of Saddam Hussein's autocratic rule.

The leading global energy monitor reported that Iraq's annual revenues from energy exports could double to an average of $200 billion annually over the next 20 years. That optimistic scenario would make Iraq's economy the same size as that of Saudi Arabia now by 2035.

"I am optimistic about Iraq and Iraq's contribution to the global oil markets and them being able to reconstruct their country," Birol said in an interview with The Associated Press. "So a new, modern and prosperous country is set to emerge in the Middle East as a result of oil and gas revenues."

The IEA is a policy adviser to 28 member countries, mostly industrialized oil consumers. The Paris-based group's predictions are important because they are seen as key benchmarks for energy markets.

In the group's "central scenario," Iraq's oil exports are projected to grow from 3 million barrels a day now to 6.1 million barrels a day in 2020 and 8.3 million barrels a day in 2035. Iraq is already the world's third-largest oil exporter.

But the IEA said Iraq needed to sort out internal issues in order for its predictions to come true. Disputes between Iraq's central government and some regional governments regarding oil contracts must be resolved.

Among the most troublesome are the contracts awarded by the Kurdistan regional authorities for access to its rich oil fields in the north of Iraq. Federal officials in Baghdad contest those contracts.