Iraq Energy Outlook
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Iraq Energy Outlook World Energy Outlook Special Report Iraq Energy Outlook World Energy Outlook Special Report Iraq is already the world’s third-largest oil exporter. It has the resources and intention to increase its oil production vastly. Contracts are already in place. Will Iraq’s ambitions be realised? And what would the implications be for Iraq’s economy and for world oil markets? The obstacles are formidable: political, logistical, legal, regulatory, financial, lack of security and sufficient skilled labour. One example: in 2011, grid electricity could meet only 55% of demand. The International Energy Agency has studied these issues with the support and close co-operation of the government of Iraq and many other leading officials, commentators, industry representatives and international experts. This special report, in the World Energy Outlook series, presents the findings. The report: Examines the role of the energy sector in the Iraqi economy today and in the future. Assesses oil and gas revenues and investment needs. Provides a detailed analysis of oil, gas and electricity supply through to 2035, highlighting the challenges of infrastructure development and water availability. Spells out the associated opportunities and risks, both for world oil markets and for Iraq’s economy and energy sector. For more information, and the free download of this report, please visit: www.worldenergyoutlook.org WEO-2012 to be released 12 November 2012 Iraq Energy Outlook World Energy Outlook Special Report 9 October 2012 001-02_pages de début_WeoIraq.indd 1 26/09/2012 12:17:34 INTERNATIONAL ENERGY AGENCY The International Energy Agency (IEA), an autonomous agency, was established in November 1974. Its primary mandate was – and is – two-fold: to promote energy security amongst its member countries through collective response to physical disruptions in oil supply, and provide authoritative research and analysis on ways to ensure reliable, affordable and clean energy for its 28 member countries and beyond. The IEA carries out a comprehensive programme of energy co-operation among its member countries, each of which is obliged to hold oil stocks equivalent to 90 days of its net imports. The Agency’s aims include the following objectives: Secure member countries’ access to reliable and ample supplies of all forms of energy; in particular, through maintaining effective emergency response capabilities in case of oil supply disruptions. Promote sustainable energy policies that spur economic growth and environmental protection in a global context – particularly in terms of reducing greenhouse-gas emissions that contribute to climate change. Improve transparency of international markets through collection and analysis of energy data. Support global collaboration on energy technology to secure future energy supplies and mitigate their environmental impact, including through improved energy efficiency and development and deployment of low-carbon technologies. Find solutions to global energy challenges through engagement and dialogue with non-member countries, industry, international organisations and other stakeholders. IEA member countries: Australia Austria Belgium Canada Czech Republic Denmark Finland France Germany Greece Hungary Ireland Italy Japan Korea (Republic of) Luxembourg Netherlands New Zealand Norway Poland Portugal © OECD/IEA, 2012 Slovak Republic International Energy Agency Spain 9 rue de la Fédération Sweden 75739 Paris Cedex 15, France Switzerland www.iea.org Turkey United Kingdom Please note that this publication United States is subject to specific restrictions that limit its use and distribution. The European Commission The terms and conditions are available online at also participates in http://www.iea.org/termsandconditionsuseandcopyright/ the work of the IEA. 001-02_pages de début_WeoIraq.indd 2 26/09/2012 12:17:35 Acknowledgements This report was prepared by the Directorate of Global Energy Economics at the International Energy Agency (IEA). It was designed and directed by Fatih Birol, Chief Economist of the IEA. The analysis was co-ordinated by Tim Gould and Dan Dorner. Principal contributors to this report were Sabah Al-Khshali (seconded from Iraq’s State Oil Marketing Organization), Mustafa Al-Maliky (seconded from Iraq’s South Oil Company), Ali Al-Saffar, Marco Baroni, Christian Besson, Alessandro Blasi, Laura Cozzi, Dafydd Elis, Capella Festa, Matthew Frank, Timur Gül, Jung Woo Lee, Paweł Olejarnik, Timur Topalgoekceli, David Wilkinson, Peter Wood and Akira Yanagisawa. Sandra Mooney and Magdalena Sanocka provided essential support. Robert Priddle carried editorial responsibility. The report benefited from valuable comments and feedback from other experts within the IEA. Thanks also go to the Agency’s Communication and Information Office for their help in producing the report, to Debra Justus for proofreading the text, and to Bertrand Sadin and Anne Mayne for graphics. This work would not have been possible without the close co-operation it has received from the federal government of Iraq, the regional and provincial governments and officials across many government bodies in Iraq. We are particularly grateful to H.E. Dr. Hussain Al-Shahristani, Iraq’s Deputy Prime Minister for Energy, for his strong support from the inception of this study through to its conclusion, which was instrumental in facilitating excellent working relations between the IEA and different ministries and government bodies in Iraq. H.E. Thamir Ghadhban, Chair of the Prime Minister’s Advisory Commission in Iraq, provided indispensable input as keynote speaker and chair of our high-level workshop in Istanbul. We are indebted to many Iraqi senior officials and experts for their time and assistance. Special thanks are due to the leadership and staff of the Ministry of Oil and, in particular, to Fayadh Hassan Neema, Director of the Technical Directorate at the Ministry of Oil, who was an invaluable interlocutor throughout, and to Falah Alamri, Director General of the State Oil Marketing Organization. H.E. Dr. Ashti Hawrami, Minister of Natural Resources in the Kurdistan Regional Government, provided valuable support and insights to the IEA team during their visit to Erbil. We greatly appreciated the welcome afforded the team in Basrah by Ahmed Al-Hassani, Deputy Governor of Basrah Governorate, and by the Provincial Council. Ambassador Fareed Yasseen, Iraq’s Ambassador to France, and his staff provided unstinting assistance to the completion of this study and the team’s visits to Iraq, as did Dr Usama Karim, Senior Advisor to Iraq’s Deputy Prime Minister for Energy. Sincere thanks also to Tariq Shafiq, Managing Director of Petrolog and Associates and one of the founding fathers of Iraq’s petroleum industry, for his expert counsel. © OECD/IEA, 2012 Acknowledgements 3 003-08 Acknowledgements_WeoIraq.indd 3 26/09/2012 12:17:51 The study could not have been realised without the substantial support provided by the Ministry of Energy and Natural Resources, Turkey and the Foreign and Commonwealth Office, United Kingdom. We also express our gratitude to Parsons Brinckerhoff and to Booz & Company for their constructive and helpful co-operation. A high-level workshop organised by the IEA was held on 4 May 2012 in Istanbul to gather essential input to this study (see photo, page 6). Participants included senior Iraqi officials, experts and industry representatives, as well as international figures including H.E. Martin Kobler, Special Representative of the UN Secretary-General for Iraq. The workshop participants have contributed valuable insights, feedback and data for this analysis. More details may be found at www.worldenergyoutlook.org/iraq. Many international experts provided input, commented on the underlying analytical work or reviewed early drafts of this report. Their comments and suggestions were of great value. They include: Majeed A. Abdul-Hussain Parsons Brinckerhoff Falah Alamri State Oil Marketing Organization, Iraq Natik Al-Bayati Prime Minister’s Advisory Commission, Iraq Abdulilah Al-Emir Deputy Prime Minister’s Office, Iraq Jabbar Allibi Independent consultant Sefa Sadık Aytekin Ministry of Energy and Natural Resources, Turkey Nicholas Bridge British Ambassador to the OECD Kevin Carey World Bank Robert Cekuta Department of State, United States Tim Depledge BP Jonathan Elkind Department of Energy, United States David Ensign Department of State, United States Gabriele Franceschini Eni Christopher Guelff Foreign and Commonwealth Office, United Kingdom Hamah-Ameen Ministry of Electricity, Kurdistan Regional Government Hawramany Michael Howard Ministry of Natural Resources, Kurdistan Regional Government Ruba Husari Independent consultant Jana Hybaskova Ambassador, European Union Delegation to Iraq Jan-Hein Jesse Clingendael Institute Ahmed Mousa Jiyad Independent consultant Sami Kamel General Electric © OECD/IEA, 2012 4 World Energy Outlook | Special Report Ali H. Khudhier South Gas Company 1 Kenji Kobayashi Japan Automobile Importers Association Raëd Kombargi Booz & Company 2 Ken Koyama Institute of Energy Economics, Japan Jeff Larkin Parsons Brinckerhoff 3 Claude Mandil Former IEA Executive Director Takahiro Mazaki Mitsubishi Corporation Hamish McNinch Independent consultant Salah Mohammed Rumaila Operating Organization Ed Morse Citigroup Asri Mousa Independent consultant Omar Moussa Schlumberger Fayadh Hassan Neema Ministry of Oil, Iraq Hans Nijkamp Shell Shohei Nishimura Japan Oil, Gas and Metals National Corporation Andrew Pearce