Oil production already provides much-needed revenue and economic development and underwrites the Iraqi federal budget. Meanwhile, gas development could also play a key role in Iraq’s future by fostering broad based economic development, improving electric service provision, and fostering value-added industries, according to the report, Shaping Iraq’s oil and gas future, launched at The Atlantic Council’s 2018 Global Energy Forum in Abu Dhabi.
In the report, Global Energy Center Deputy Director Ellen Scholl analyzes the political realities in Iraq and the state of oil and gas development, emphasizing that both resources are crucial to Iraq’s future and economic recovery. While oil and gas production cannot single handedly ensure Iraq’s recovery, Scholl contends that “such a recovery will prove elusive, if not impossible, without it.”
The report acknowledges the challenges to increasing oil production and turning gas from potential to production. Oil and gas development are in dramatically different stages, the former being much more mature than the latter. While oil development is impacted by the changing global oil market, gas development is hampered by different challenges, including the need for competitive gas pricing. Both face challenges related to infrastructure investment and development.
Despite the challenges, the benefits of developing both oil and gas are considerable, underscoring the need to contend with the country’s long-standing questions over resource management. The current political climate and upcoming elections in 2018 provide an opportunity for Iraq to forge a resource development model predicated on cooperation and mutual benefit. Development of gas resources in particular could undergird cooperation with neighboring countries and the development of regional economic development and trade.
With elections in federal Iraq and the KRG on the horizon in 2018, potentially new governments could seize this as an opportunity to overcome hurdles to oil and gas development and address long-standing challenges. While this remains to be seen, this report provides recommendations for issues to consider, and challenges to address.