Since the last part of 1980s, the refining industry in Iraq is considered as the most blooming industry, having well-established contribution towards the economy and technological advancement of the country.
But, due to country internal situation and unrest due to war, Iraqi oil production and technological advancement was stopped and country reputation as an oil major in the whole world was ruptured. However, presently, the country is moving in a rapid speed to achieve its oil target and expected to become one of the major players in oil industry again.
International Energy Agency or IEA has explained that refining capacity of Iraq is huge and presently it is anticipated to be around 960K bd. Though the country is producing 670K bd, up to June, 2012! It is quite expected that IEA’s calculation is on the basis of final output as it is only concerned with the fact that how much Iraq is going to contribute to the world. Senior IEA officer said, “The range of oil products produced by Iraq’s refineries falls well short of its domestic needs and of the possibilities afforded by modern, more complex refineries.”
Quality of Crude
If there was proper maintenance and seamless infrastructure, Iraq’s Baiji refinery have all potentials that are possessed by the other modern and advanced oil refineries. The productions of light products are expected to be increased at a massive speed. However, delay in proper implementation of the Iraqi oil vision is causing major concerns. Barsa refinery was expected to be financed by Japanese loans. On the context of crude quality, IEA remarked, “in 2011, Iraq blended an average of 150 kbd of heavy fuel oil into the exported stream of crude oil, lowering its quality and price.”
The addition of refining capacity in recent times is definitely a major step which is signifying the Iraqi oil industry to do well in future days. In Daura refinery, two large distillation units have been installed recently. Around 220 million dollar has been expensed by the ministry of oil in Iraq to regain and smoothen up the oil refinery process and to take economic advantages through it.
However, IEA seems to be a bit less optimistic about this fact as it exerted, “in our projections, we assume that this investment does go ahead, but later than currently envisaged by the authorities.” And that “the first of Iraq’s new refineries becomes operational in 2019.”
In next 20 years, naturally oil demand for the world will increase rapidly. However, it is also expected that heavy oil production from middle-east will come to the rescue of that demand. This means, Iraq is going to become a major competitor for Saudi in oil production and export.
Around 27 billion dollars investment is required in the Iraqi export sector. The amount is approximately equal to the cost of imports in last nine years. However, Iraqi infrastructure demands drastic changes to do well. In order to do that few massive steps and solid planning is required; otherwise, Iraq will fail to live up to its potential.
Source: [Gulf News]