Iraqi oil close to pre-war levels

The BBC ^ | Tuesday, 25 November, 2003, 12:53 GMT | BBC Story Monkey

[alnitak]

Iraqi oil output is close to pre-war levels despite continued terrorist attacks, a state official has told AFP.

Most of the production is coming from the south of the country where bombings are less frequent than in the north.

The country's interim administration has been criticised for failing to halt the attacks which have often targeted pipelines.

On Monday, an important gas pipeline was destroyed close to Kirkuk, hurting supplies to the largest oil refinery.

State oil

Production of crude is currently at 2.2 million barrels a day (b/d), Shamkhi Faraj, director of the State Oil Marketing Organization, told AFP news agency.

He said they hope to hit pre-war levels of 2.8 million b/d by March of next year.

Exports will also rise, climbing to between 2 million and 2.1 million b/d in March.

The price of oil has increased on the international market this year partly as Iraq's output slumped following the US-led invasion in March.

The Organisation of Petroleum Exporting Countries is mulling production cuts to offset an increase in Iraqi and Russian output.

Mr Faraj said Iraq would not need a large amount of investment to get to 3 million b/d.

The ministry expects production to reach as much as 4 million b/d by the end of 2005.

[aardvark1]

My question about the oil situation is this:
1) 10 years ago, we went to Kuwait to save them from Iraqi takeover.
2) At the same time we have been saving the collective butt of the House of Saud from takeover by the lunatic fringe of their "sacred" religion.
3) Now we're in the process of delivering Iraq from a despot.

Will OPEC continue to "hold us hostage" with their collusive monopoly on world oil or will we see any favors for our efforts?

[PeteFromMontana]

"Iraqi oil output is close to pre-war levels despite continued terrorist attacks, a state official has told AFP"





This is clearly Bush's fault. (end sarcasm)

[reformedliberal]

We aren't asking for favors. We only ask for free trade at market prices. If we seek or receive any special tretment, the world will scream we went into Iraq for the oil. The administration has to balance economic policy w/geopolitics.

Oil is flowing across the world. It is fungible: it doesn't matter where it's from as long as it can get to where the money is to pay for it.

If the pubs can continue to play regional vs party interests in Congress, we will get an energy bill. If not, we can elect more pro-domestic production folks to Congress next year and then get an energy bill.

So far, things appear to be working in our favor, but that's JMHO.

[alnitak]

As regards oil production, they will continue to act rationally from their perspective. To wit, they will seek to maximize (cost per barrel * number of barrels sold). If anybody is doing the west a favour at the moment it is the Russians with their ever increasing oil exports (soon to overtake Saudi, I believe).

These figures are a year old now but still representative. Please compare the 2001 GDP Per Capita (Unadjusted USD) to Annual Per Capita Oil Income (Unadjusted USD) to see how important oil is to each OPEC economy. If the price fell to its long term trend value of $10USD per barrel most of the economies in the Middle East would collapse into civil war.

In 2001, according to "Statistical Review of World Energy June 2002" by British Petroleum global oil production was 74.5 MBPD (million barrels per day, a barrel is 159 liters). Of this, 30 MBPD (40.7% of the total) was produced by the OPEC countries.

Table 1: OPEC Countries and their Incomes

Country	Date Joined OPEC	Location	2001 Oil Production (MBPD)	2001 Oil Production (% Of World Total)	2001 Population (Million)	2001 Total GDP (Unadjusted MUSD)	2001 GDP Per Capita (Unadjusted USD)	National Oil Income (Unadjusted MUSD)	Annual Per Capita Oil Income (Unadjusted USD)	2001 GDP Per Capita (PPP-USD)
Saudi Arabia	1960 *	Middle East	8.768	11.8	22.8	186,489	8,179	80,063	3,512	10,600
Iran	1960 *	Middle East	3.688	5.1	66.1	114,052	1,725	33,676	509	6,400
Venezuela	1960 *	South America	3.418	4.9	23.9	124,948	5,228	31,211	1,306	6,100
Iraq	1960 *	Middle East	2.414	3.3	23.3	NO DATA	NO DATA	22,043	946	2,500
United Arab Emirates	1967	Middle East	2.422	3.2	2.4	NO DATA	NO DATA	22,116	9,215	21,100
Nigeria	1971	Africa	2.148	2.9	126.6	41,373	327	19,614	155	840
Kuwait	1960 *	Middle East	2.142	2.9	2.0	32,806	16,403	19,559	9,780	15,100
Libya	1962	Africa	1.425	1.9	5.2	34,137	6,565	13,012	2,502	7,600
Indonesia	1962	Asia	1.41	1.9	228.4	145,306	636	12,875	56	3,000
Algeria	1969	Africa	1.563	1.8	31.7	54,680	1,725	14,272	450	5,600
Qatar	1961	Middle East	0.783	1	0.77	16,454	21,369	7,150	9,285	21,200
TOTALS			30.18	40.7	533	750,245		275,590

Sources: List of OPEC countries from OPEC - (*) indicates a founder member . Population figures and PPP GDP estimates from the CIA World Factbook via theodora.com. The unadjusted GDP figures are from the World Bank. The unadjusted GDP per capita is calculated by dividing total unadjusted GDP by the population. Oil production figures are from BP; please note that there are slight discrepancies in some of the percentages; Indonesia has a higher % than Algeria, but a lower MBPD figure, likewise Iraq vs. UAE. I am awaiting corrected data from BP. The errors are slight and do not affect conclusions drawn.

Populations: Several OPEC states have large populations of non-nationals. The population figures above include 5.4 million non-nationals for Saudi Arabia, 1.6 million for UAE, 1.2 million for Kuwait and 0.66 million for Libya. These populations have been included when calculating the GDP per capita figure.

National Oil Income USD: This figure is calculated using the formula Income = Production_in_MBPD * $cost_per_barrel * 365.25. Cost per barrel is set at $25, in line with recent oil prices. Since extraction costs are ignored, the result actually inflates the oil income slightly. The over-estimate is minor for the Gulf states, where extraction costs are $2 to $3 per barrel, but rather more for non-Gulf countries. No allowance has been made for export of refined products rather than raw oil - refined products are more valuable than raw oil. Also, no allowance has been made for domestic consumption. Dividing the figure in this column by the population gives the per capita oil income.

I have highlighted the countries where oil income per person is at a level which I consider significant from a Western perspective. 

Kuwait, UAE and Qatar stand out as societies that generate truly impressive income per person, even by Western standards, however they all have tiny populations. Indonesia, Iran and Nigeria have large populations and correspondingly small incomes per person. Saudi Arabia stands out for combining a moderate population and high oil income, fulfilling its reputation as the 800 pound gorilla of OPEC. Opinion varies as to what is the "natural" market price of oil, i.e. what would the average price be if the international market were fully efficient and free from the distorting impact of OPEC. A figure of $20 is often mentioned, yet the oil price was as low as $10 as recently as 1998. If $10 pertained, then these figures would need multiplying by 0.4. Such a factor would leave only Kuwait, UAE and Qatar as having a significant per-capita oil income! 

One figure not shown in the table is population growth rate, but all the countries have positive population growth. The Gulf States have some of the highest rates in the world - 2-5% - their populations will double in about 20 years at such rates, and all other things being equal their oil income per person will therefore halve during that period. This is not a new trend, it has been in place for many years. Historical data is hard to come by, but Iran's oil income per person income in 1995 was less than 10% of what it was in "the boom years" of the 1970s. According to The Economist's survey of the Gulf Cooperation Council countries, Saudi Arabia's GDP per head is now half its 1980s peak. This combination of rising populations and declining oil prices constitutes a severe, ongoing and worsening problem for the OPEC countries. 

The per capita incomes for Iran and Iraq are notably low, given the prominence these two countries usually receive as "oil titans". The Iranian figure of $509 is so low as to make it debatable whether Iran should be considered a petro-economy at all. Iraq's production could well double in the next decade as sanctions are lifted, modern technology is introduced and the country seeks to rebuild, but this will still not propel the country into a sybaritic life of pleasure and ease.

[alnitak]

Here is the latest oil production figures from BP for the year 2002:

Thousand barrels daily	Year 2002	Change 2002 over 2001	2002 share of total
Saudi Arabia	8680	-3.7%	11.8%
Russian Federation	7698	9.1%	10.7%
USA	7698	0.3%	9.9%
Mexico	3585	1.0%	5.0%
China	3387	2.5%	4.8%
Iran	3366	-8.6%	4.7%
Norway	3330	-3.0%	4.4%
Venezuela	2942	-8.3%	4.3%
Canada	2880	6.4%	3.8%
United Kingdom	2463	-0.6%	3.3%
United Arab Emirates	2270	-6.9%	3.0%
Iraq	2030	-14.4%	2.8%
Nigeria	2013	-8.5%	2.8%
Kuwait	1871	-9.8%	2.6%
Algeria	1659	6.7%	2.0%
Brazil	1500	12.2%	2.1%
Libya	1376	-3.5%	1.8%
Indonesia	1278	-8.1%	1.8%
Kazakhstan	989	17.8%	1.3%
Angola	905	22.0%	1.3%
Oman	902	-6.2%	1.3%
Malaysia	833	5.6%	1.0%
Argentina	800	-3.2%	1.1%
India	793	2.0%	1.0%
Qatar	755	-3.3%	1.0%
Egypt	751	-1.0%	1.0%
Australia	730	-1.0%	0.9%
Colombia	601	-4.2%	0.8%
Syria	576	-1.9%	0.8%
Other Europe & Eurasia	480	3.1%	0.7%
Yemen	473	0.4%	0.6%
Ecuador	410	-1.5%	0.6%
Denmark	371	7.0%	0.5%
Vietnam	354	1.0%	0.5%
Azerbaijan	308	2.8%	0.4%
Gabon	295	-2.0%	0.4%
Rep. of Congo (Brazzaville)	258	-4.7%	0.4%
Equatorial Guinea	237	31.0%	0.3%
Sudan	233	10.4%	0.3%
Brunei	210	3.5%	0.3%
Thailand	197	13.4%	0.2%
Turkmenistan	182	12.4%	0.3%
Uzbekistan	171	0.3%	0.2%
Other Asia Pacific	160	10.9%	0.2%
Trinidad & Tobago	155	15.4%	0.2%
Other S. & Cent. America	148	7.7%	0.2%
Romania	127	-2.3%	0.2%
Italy	103	29.8%	0.2%
Peru	98	-	0.1%
Tunisia	76	3.3%	0.1%
Cameroon	72	-9.9%	0.1%
Other Africa	61	-4.8%	0.1%
Other Middle East	49	-	0.1%
Papua New Guinea	46	-20.7%	0.1%
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[aardvark1]

thanks. very educational

[FairOpinion]

More Iraqi good news ping.

[Ragtime Cowgirl]

Thanks, FairOpinion. (^:
~~~~~~~~~~~~~~~~~

Iraqi oil output is close to pre-war levels despite continued terrorist attacks, a state official has told AFP.

~~~~~~~~~~~~~~~
Last week's overlooked good news.

[Ragtime Cowgirl]

BBC Story Monkey

Lol!

[Alamo-Girl]

Bump!

[cake_crumb]

If the mass media can't put a negative spin on it, they won't report it.

[cake_crumb]

"thanks. very educational"

Sure is.

[Radix]

Interesting stuff, thanks for posting it. I am not any sort of an Economist, nor do I know a lot about the physical distribution of petroleum products.

I do know, that radical Islamics have declared war on our American Economy, and I also believe that they have seriously miscalculated.

I do not care what the Libs say about the war being about oil. Of course it is. What we have here now is an opportunity to elevate these Iraqi people who have been under oppression for so long to a new age and a new paradigm.

The media whack jobs seem to think that there is something wrong with that agenda. I am not trying to be seen as a Nazi here, nor am I interested in establishing a new world order. The fact is that America has been a pioneer in every way for achieving the objective of the Freedom of Man.

I can't say just when the establishment media decided to oppose that objective with their incredibly irresponsible biases, and slanted reporting. The reality is, they are by and large subversive. They are contrary to things American, and that is a difficult thing to comprehend, at least from here it is.

Getting the Iraq oil flowing, and improving their Economy, is a worthy objective. The French, and certain other of our so called allies have been collaborating with Terrorists Regimes for decades now. Finally, we have an Administration, that has the sack to deal with the realities of this harsh World.

Screw the French, and screw the New York Times, et al. They are attempting to steer us down a road to certain perdition, and it is time to stop them. That is what we are doing!

[blackie]

Iraqi oil output is close to pre-war levels despite continued terrorist attacks ~ Bump!

The democrats are very sad.

[alnitak]

Thanks. It's from an essay I worked up just before the Iraq war to refute the "war for oil" argument that was being trotted around.

My main point was that that argument did not make sense from an economic perspective, but I briefly treat the security of supply aspects at the end.

You can read the rest here. You may like the comparisons between US states and OPEC GDP :-)

Incidentally Radix, as regards the distribution of oil reserves, you make like this article about unconventional oil reserves, and this one which goes into a little more detail about the Orinoco heavy oil reserves - Venezuela has more heavy oil than the entire Middle East has conventional oil reserves. After I had read that, I stopped worrying about the world running out of oil :-) And don't even get me started about gas hydrates:

Worldwide, estimates of the natural gas potential of methane hydrates approach 400 million trillion cubic feet -- a staggering figure compared to the 5,000 trillion cubic feet that make up the world's currently known gas reserves.