The country’s Oil Ministry, with backing from the Prime Minister Nouri al-Maliki, will set a new target to produce between 6.5 million and 7 million barrels per day by 2017, down from original plans to pump 12 million barrels, according to industry insiders.
Iraq, which is a member of the OPEC cartel that pumps 40 per cent of the world’s oil, produces about 2.68 million barrels a day, barely higher than under Saddam Hussein.
High oil prices, which have doubled since the 12 million target was set two years ago, will compensate Iraq for the lower production. Ministers also recognize that creaky pipelines and storage facilities could not cope with such an increase.
The International Energy Agency estimates that investment of more than $US160 billion ($149bn) would be needed to meet the target.
Samuel Ciszuk, senior energy analyst for IHS Energy, said an over-ambitious target was politically motivated, being set before elections in 2009. “It was clearly designed to impress the Iraqis ahead of the elections. The oil majors will now seek more attractive terms.”