Iraqjumped two places to No. 2 in OPECs rankings this year, cementing its position among the worlds leading oil producers. NeighboringIrandropped three spots to fifth as international sanctions took hold.Second only toSaudi Arabiawithin the Organization of Petroleum Exporting Countries, Iraqs output rose by 24 percent this year as the BP Plc-led Rumaila field increased supply. Iranian production shrank by the same percentage to the lowest level since 1988, data compiled by Bloomberg show, and its exports will continue to drop into 2013, according to theInternational Energy Agency.
Iraq will continue to produce as much crude as it can because oil is and will remain its main source of income in the next few years, said Anas Alhajji, chief economist for NGP Energy Capital Management LLC in Irving,Texas, which oversees $13 billion in funds. Iraq wants every penny it can get.
The turnaround illustrates the nations contrasting geopolitical fortunes. Iraq has become the regions second- fastest growing economy, attracting investment fromRoyal Dutch Shell Plc (RDSA)and OAO Lukoil in the nine years since the ouster ofSaddam Hussein. Iran, stymied by a European Union and U.S. ban on oil exports, will suffer a decline in gross domestic product this year, according to theInternational Monetary Fund.
Export Reliability
Iraqs crudeproductionaveraged 3.35 million barrels a day last month, Bloomberg data show. Irans daily output slumped to 2.7 million, less than Venezuela andKuwait, OPECs third- and fourth-largest producers, respectively.
The reliability of Iraqi exports is still at risk as the central government inBaghdadand the Kurdistan Regional Government fail to agree on crude revenue and contract terms. Exxon Mobil Corp. wants to sell its stake in the West Qurna-1 field in southern Iraq, Oil Minister Abdul Kareem Al-Luaibi said on Nov. 11.
Constraints on export pipelines, government bureaucracy, and the continuing dispute with the autonomous Kurdish region will keep the country short of its ambitious goals, Robin Mills, the head of consulting at Dubai-based Manaar Energy Consulting and Project Management and a formerMiddle Eastspecialist at Shell, said in a Dec. 26 e-mail.
Global oil supply has risen this year, led by the U.S., where producers are using hydraulic fracturing, or fracking, to unlock deposits in shale formations fromNorth Dakotato Texas andOklahoma. Production worldwide averaged 90.8 million barrels a day in the third quarter, up 2.7 percent on 2011, the Paris- based IEA said in its monthly report on Dec. 12.
High Maintenance
Output among OPEC members rose to a four-year high in August, a month after the EU banned imports of Iranian crude, as members sought to benefit from Brent at more than $100 a barrel.
Brent, the benchmark for more than half the worlds crude, is poised for a fourth annual gain after averaging a record $111.66 a barrel this year on the ICE Futures Europe exchange. West Texas Intermediate futures, the most-traded U.S. grade, is set to drop this year for the first time since 2008 inNew Yorkafter rising domesticoutputbolstered inventories at Cushing, Oklahoma, the nations biggest storage hub. WTI averaged $94.17 a barrel this year.
Everyone is high maintenance these days, said Mehdi Varzi, a former Iranian diplomat and director of Varzi Energy Ltd., an energy-consulting company. The major players all need highoil pricesfor their own reasons.
Libya Climbs
Libyas production more than doubled in 2012 as operators includingTotal SA (FP)returned to the North African nation after last years rebellion againstMuammar Qaddafi, lifting its position among OPECs 12 members to ninth from 11th. Saudi Arabia, the groups biggest producer, pumped an average of 9.8 million barrels a day this year, the most since at least 1983.
Saudi Arabias objective is to stabilize the market, Manaar Energys Mills said.
Irans output has been in decline since the end of 2008, Bloomberg data show. The drop accelerated this year as the U.S. and EU tightened sanctions aimed at curbing the Islamic republics nuclear program. Iran says its atomic projects are for civilian purposes.
The Iraqi economy will grow 10.2 percent this year and 14.7 percent in 2013, according to IMF forecasts. Thats the second- fastest rate in the Middle East and North Africa, afterLibya.
Rumaila is forecast to produce 2.85 million barrels a day toward the end of the next decade, making it the worlds second- biggest field, according to BPs website. The field, which includes China National Petroleum Corp. as a partner, is pumping at a rate of 1.43 million, Salem Bin Ashur, a spokesman for the committee managing the field, said on Dec. 6.
The following table shows rankings for OPECs 12 members,
according to data compiled by Bloomberg. This is based on
production rates as of Dec. 31, 2011 and Nov. 30 this year, the
most recent data available.
2012 2011
Saudi Arabia Saudi Arabia
Iraq Iran
Venezuela Venezuela
Kuwait Iraq
Iran Kuwait
U.A.E. U.A.E.
Nigeria Nigeria
Angola Angola
Libya Algeria
Algeria Qatar
Qatar Libya
Ecuador Ecuador
By Bloomberg
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