WASHINGTON (AFP) – The International Monetary Fund Monday expressed doubts over Iraq’s ability to meet its long-term targets for oil production, currently the source of nearly 90 percent of government income.
The IMF said infrastructure constraints were likely to prevent Iraq from boosting production from 2.5 million barrels now to its goal of 13 million barrels by 2017 — more than oil king Saudi Arabia’s current production.
“While these production goals could be feasible in the longer term, the main risks in the coming years will be bottlenecks in the export infrastructure that will need to be addressed,” the IMF said, in a review of its $3.7 billion support program.
Based on more conservative assumptions for the time it will take to expand Iraq’s export capacity, oil production could still increase to over five million barrels a day by 2017.
The IMF cited the need for huge investments in port facilities, pipelines, desalination plants (for water to be injected into oil fields) and storage facilities.
In the very best case scenario, it said, Iraq could reach 12.2 million barrels a day by then.
It forecast production would rise to 2.75 million barrels a day, this year.
Last year production constraints held back exports to 1.85 million barrels a day from the planned 2.1 million.
But higher market prices still garnered Baghdad $50 billion, four percent more than it expected.
The IMF also reported that the government’s deficit was running “well below” forecast.
But it warned about joblessness especially among Iraqi youth, and referred to the violent demonstrations elsewhere in the Middle East in that context.
“Although reliable data are lacking, unemployment was estimated at about 12 percent in 2008,” the IMF said.
“Actual unemployment, particularly among the younger generation, is likely to be higher, however, as a large part of the adult population has not entered the labor force.”