Iraq's new Oil Minister Abdulkarim al-Luaybi wasted precious little time in making his presence felt. Indeed, just a day after being installed as minister, al-Luaybi made some interesting declarations.
"Today, our production is over 2.6 million b/d," al-Luaybi told reporters after the installation ceremony, adding, "This figure has not been reached for more than 20 years."
Al-Luyabi also expressed his aim of increasing Iraq's production capacity, saying that developing the country's economy and providing funds to finish projects and create jobs for people "all depend on revenue from oil."
With those clear needs in mind, al-Luyabi said his ministry would "reactivate the role of the exploration teams and geological surveys in order to strengthen national production."
Expansion plans, but...
The new minister also reiterated plans announced earlier to expand oil systems, including "projects to expand oil and gas pipelines, and make good use of the gas that comes out with the extraction of oil."
Projected pipeline expansion is to include three new lines to Syria, one of 1.5 million b/d capacity, another of 1.25 million b/d capacity, and a third for natural gas. Southern Iraq will also see new oil pipelines aimed at boosting exports via Basra to 4.5 million b/d from the current 1.8 million b/d.
And, in a completely new departure, al-Luyabi said the Iraqi government will build several refineries in an effort to transform the country into one that exports products instead of just crude.
Altogether, four refineries are to be constructed in 3-5 years' time: one with a 300,000 b/d capacity in Nasiriyah, a 140,000 b/d facility in Karbala, a third in Maysan with 150,000 b/d capacity, and a fourth in Kirkuk with a capacity of 150,000 b/d.
...Kurdish problem remains
Speaking of Kirkuk, which is the capital of semiautonomous Kurdistan, the new minister also gave assurances that Baghdad would soon come to terms with the Kurdish Regional Government.
Altogether, the KRG has signed a reported 37 contracts with 40 international oil companies, amounting to an investment of $10 billion when completed, deals that Baghdad has long bobbed and weaved over.
Two weeks ago, al-Luaybi that Iraq would recognize those Kurdish contracts, but a week later was corrected by spokesman who said: "The ministry has not yet discussed the issue of recognizing the Kurdistan contracts."
For the moment, the spokesman said that "Kurdistan will hand over 150,000 bbl to the ministry of oil, the ministry will export this oil, and the government and finance ministry will pay the real costs of the production to the companies."
Real costs? Hmmm. One can only wonder who will determine those costs and by what formula.
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