- Created: Wednesday, 03 October 2012 10:02
- Written by Jim Craven
In August Iraq overtook Iran as the second largest oil producer in OPEC. It had not been in this position since the 1980s. Although the result reflects the dwindling sales from Iran because of the international sanctions, Iraqi production has nevertheless increased to more than three million barrels per day (mbpd) in recent months. This follows the signing of major contracts with international oil companies between late 2008 and early 2010 to develop a dozen oil fields. The companies include Exxon Mobil, Royal Dutch Shell, BP, Total, Russian Lukoil and the Chinese CNPC. In addition, Total, Exxon Mobil and Russian Gazprom signed deals with the Kurdish regional government. The Iraqi government has a target to produce 12 mbpd by 2017 (more than Saudi Arabia), though a more realistic estimate would be 4.5 mbpd because of the lack of pipeline infrastructure. The oil companies, however, are being paid per barrel produced regardless of whether or not they meet government targets. This is far more profitable than simply being paid for the services they provide, although oil drilling contractors are receiving above rate fees from the Iraqi government.