BAGHDAD (AP) – Iraq’s oil sector is rebounding after a catastrophic year sparked by the coronavirus pandemic, with key investment projects on the horizon, Iraq’s petroleum minister said on Friday. But he also warned that a lingering bureaucratic culture of fear threatens to stand in the way.
Iraq is currently trading oil at $ 68 a barrel, nearly the roughly $ 76 needed for the state to operate without depending on the central bank to meet government spending.
Oil Minister Ihsan Abdul-Jabbar Ismail has taken on the unenviable task of overseeing Iraq’s most vital industry at the height of falling oil prices that more than halved oil revenues last year .
With the industry rebounding, Ismail told The Associated Press, he can now focus on other priorities. The interview which offered a rare glimpse into the inner workings of the country’s most important ministry – the Iraqi oil industry is responsible for 90% of state revenue.
Topping its list is the development of the country’s gas sector, a central condition for Iraq to be eligible for US exemptions allowing energy imports from neighboring Iran. To this end, Iraq seeks to develop long neglected gas fields and to capture flue gas from oil sites.
Ismail said he hoped contracts would be signed in the coming months to develop three main projects that could increase Iraq’s gas capacity by 3 billion standard cubic feet by 2025. Iraq currently imports 2 billion standard cubic feet to meet national needs.
Iraq is currently in the process of awarding China’s Sinopec for the development of the Mansuriya gas field in Diyala province, Ismail said. The field could add 300 million standard cubic feet of gas to domestic production.
The ministry is also in talks with France’s Total to develop an ambitious mega-project in Ratawa, southern Iraq, which would include a gas processing hub from four different oil fields. And on the Akkas field in Anbar province, the ministry is in the early stages of negotiations with the American Shlumberger and a Saudi company to develop the field.
Although negotiations with international companies have accelerated, Ismail said a culture of fear entrenched within his ministry remains a major concern. Investors blamed icy bureaucracy and indecisiveness within the ministry’s ranks for thwarting the plans.
“The most harmful corruption is delays in decision making, or no decision making at all,” Ismail said.
“It is culture: to stay away from any business, to stay away from inspectors,” he added. “I think it is corruption that is slowing the economy.”