Oil key to regenerating Iraqi economy

Oil key to regenerating Iraqi economy
Iraq, March 18, 2013

Despite currently being the third largest producer in the world, oil has been something of a curse for the people of Iraq. Few ordinary Iraqis have seen the benefits of their mineral wealth, and many blame oil for three wars in three decades. Nonetheless, many feel that if the wealth from Iraq's oil fields can be harnessed, it will be the key to regenerating the country.


Security is tight on the checkpoints heading out of Basra into the Western desert.

They guard the precious resource over which wars have been fought, and hundreds of thousands have died.


These are the largest of Iraq's Oil fields wells and refineries dot the landscape.

Geological surveys indicate Iraq could have the largest oil reserves in the world.

Inside the city, the oil boom is bearing fruit.


The Al Dinar gas station opened only 6 months ago now it sells nearly three hundred thousand liters of petrol every day.


And there is no shortage of supply.

Nasir Khasim, Manager, Ali Dinar Gas Station, said, "Here Oil is everywhere, we have so much oil, and I think there will never be any shortages, we are a fortunate country and we will use it to develop".


But Iraq’s Oil industry has a major problem.

This facility was destroyed by bombing in the first gulf war in 1991.

Like many of Iraq's oil facilities, it has suffered decades of neglect.


Tony Cheng, CCTV Correspondent,said, "After 30 years of war, of dollars."

With Iraq's only major source of revenue coming from Oil, this of major concern to Dr. Hussein Shahrastani, the Deputy Prime Minister.


And he admits frankly that to get to peak production levels will require massive reinvestment of revenue.


But new developments like this one for Petro China are part of the solution.

Service Contracts awarded to foreign Oil companies in 2010, require those companies to help regenerate Iraq’s Oil industry.


Iraq retains ownership of the Oil itself the foreign companies extract the oil in return for purchase at a guaranteed price.


And there is no shortage of investors as this event promoting Shell's interest in Basra indicates.


The contracts have generally won the support of Iraqi politicians, but MP's are keen to ensure that Iraq doesn’t sacrifice too much for the all important Oil sector.


Susan Al Saad, Iraqi Parliament Member, said,"These investment companies will develop our oil sector but we must not forget other important sectors, like agriculture and industry, and we notice that when investment goes into the oil sector it creates a lot of pollution."


Work is now beginning on relaying pipelines and expanding the capacity of Iraq’s Oil infrastructure.


But it will be some time before ordinary Iraqis start to see the benefit of the extraordinary natural resource that sits beneath their feet.


http://www.iraqdailyjournal.com/story-z7257759