SEOUL (Reuters) – Iraq hopes to raise oil production by nearly 1 million barrels per day (bpd) this year, achieving its long-held target of 3 million bpd by restoring northern exports, its oil minister said on Thursday.
Iraq has struggled to overcome the sabotage and outdated infrastructure that has hobbled its production since the U.S.-led invasion of 2003, largely due to unrelenting attacks on a key pipeline that runs north through Turkey.
It has regularly fallen short of production and export targets aimed at restoring pre-war levels.
“Iraq wishes to exceed producing 3 million barrels a day in 2007 — this is achievable by repairing the northern pipeline that connects to the Mediterranean,” Hussain al Shahristani told Reuters after a meeting with South Korean energy officials.
Iraq produced 1.97 million bpd in March, up from 1.89 million bpd in February, a Reuters survey shows, but Shahristani said last December that 2006 production averaged 2.3 million bpd.
Despite the weak production figures, exports climbed last month to 1.62 million bpd, the highest since last September, on increased shipments from the southern Basra oil terminal, shipping sources said.
Shahristani said the country was targeting oil production of more than 4 million bpd in 2011.
Shahristani was in Seoul to sign a cooperation deal with South Korea’s energy minister Kim Young-joo on broadening opportunities for South Koreans to secure oilfields in Iraq, anxious to inject new investment into the ailing industry.
In 1997, state-owned Korea National Oil Corp. (KNOC) and Iraq’s oil ministry under Saddam Hussein signed a preliminary deal to develop the Halfaya oilfield, estimated to hold up to 3.8 billion barrels of reserves and produce 250,000 bpd.
The South Korean energy ministry said the deal was never followed through due to United Nations financial sanctions against Iraq. But Iraq will “positively consider” involving South Korea in the field once oil legislation is in place, according a memorandum of understanding signed by the two sides on Thursday.
Iraq issued invitations for 15 Arab, Asian and American firms to drill 100 oil wells in the country’s south as part of efforts to boost production, the oil ministry said earlier this month.
The OPEC member has the world’s third-largest proven oil reserves and needs billions of dollars to revive its oil sector, which is crucial for rebuilding its shattered economy.
In February Iraq’s cabinet endorsed a draft oil law regulating how wealth from the country’s vast oil reserves will be shared by its ethnic and sectarian groups.
The oil law, which is awaiting parliament’s ratification, has given the regions the right to negotiate with international firms on developing oilfields.
“It is achievable to pass the law within two months since all political parties are in favor,” Shahristani said.
The law will also restructure the Iraq National Oil Company (INOC) as an independent holding firm and establish a Federal Council as a forum for national oil policy.
The world’s top oil companies have been maneuvering for years to win a stake in Iraq’s prized oilfields such as Bin Umar, Majnoon, Nassiriyah, West Qurna and Ratawi, all located in the south of the country.