IEA : Iraq crucial for global energy supplies

The International Energy Agency has pinned great hopes on Iraq to become the second most important player in global oil supplies over the next few decades. But it has also warned of serious hindrances still in place. The Paris-based International Energy Agency (IEA) said on Tuesday Iraq looked certain to provide the largest contribution to global oil supply growth in coming decades. In its Iraq Energy Outlook presented in London, the agency added that it expected the country to produce 6.1 million barrels per day by 2020, up from around 3 million bpd right now. The IEA claimed Iraq could even overtake Russia as the world's second largest oil producer by 2030. Already, Iraq's increasing oil output has been helping to keep a lid on prices as western sanctions target Iranian exports and supply declines from other regions such as the North Sea. No clear sailing "Our report shows that we're all interested in Iraq using its potential to the full and reviving its economy," IEA Director Maria van der Hoeven said in a statement. However, the agency's projections of future oil production in Iraq reflect only half of what Baghdad itself aims to achieve. Experts have questioned Iraq's ability to boost output to 12 billion bpd by 2017 as called for under current contracts, citing a range of obstacles such as infrastructure woes, corruption and red tape. "We think our own trajectory is plausible when you look at the challenges in front of Iraq," said the main author of the energy outlook, IAE Chief Economist Fatih Birol. Oil output in Iraq started to rise again in earnest in 2010 in the wake of important contracts with energy giants BP, Exxon Mobil, Royal Dutch Shell and others.