Iraq's oil minister said Wednesday his country would work with OPEC to ensure stability of oil prices, even as he stressed new production from Iraq's vast fields would help meet growing oil demand in the future.
Iraq's push to ramp-up production to a projected 12 million barrels per day by 2017 has stoked worries among several fellow members of the Organization of the Petroleum Exporting Countries. The concern is that the new output would flood the market, driving prices lower as the 12-nation producer bloc seeks to keep oil at about $75 per barrel -- a level it argues is fair for consumers and producers alike.
Hussain al-Shahristani said Iraq's 115 billion barrels of proven conventional crude reserves "can meet the need for oil for tens of years, with an average of 10 million barrels a day" in production. He spoke during a celebration marking the 50th anniversary of OPEC's founding in Baghdad.
Al-Shahristani also appeared to look to calm fears, saying while Iraq desperately needed oil revenues to rebuild its battered economy, the country was "determined to support OPEC in achieving its goal ... of stability in oil prices."
Iraq relies on oil revenues for 95 percent of Iraq's revenue -- money it sorely needs to rebuild after decades of wars and sanctions hobbled its oil sector.
Last year, Iraq awarded 12 oil contracts to international oil companies that have pledged to boost output capacity to 12 million barrels per day by 2017. That would put Iraq's output just shy of OPEC kingpin Saudi Arabia's current production capacity.
Many analysts say that projection is overly optimistic.
Iraq currently produces 2.4 million barrels per day, far below its potential. The country -- which sits atop the world's third largest proven crude reserves -- is not included in the producer bloc's output quotas. It exports between 1.7 to 1.9 million barrels a day, with the fluctuations largely linked to technical failures and attacks on an export pipeline that runs from Kirkuk in northern Iraq to the Turkish port of Ceyhan.
Last month, al-Shahristani told The Associated Press that Baghdad will consider abiding by OPEC quotas once its crude production hits 3.5 million to 4 million barrels a day in two to three years.
Analysts have said that Iraq's new output -- even at a fraction of what the country is hoping for -- could seriously squeeze prices.
At the group's birthday celebration at its Vienna headquarters on Tuesday, OPEC's secretary general said the bloc was satisfied with prices at the current levels, but also noted that the group must also be ready to adapt to changes in the market in the coming years.
One shift for the group over the past 50 years has been a greater focus on Asian markets, with demand for oil rising sharply over the past few years in China and India.
Falah al-Amiri, the head of the state oil marketing organization, SOMO, said Iraq is considering increasing its oil exports to Asian emerging markets in the coming years. Al-Amiri said that about 55 percent of Iraq's oil exports currently go to the Asian markets.