Saudi Ajlan & Bros signs $7bn deals with Malaysian firms

IRBIL: Oil production in the Iraqi region of Kurdistan could almost halve by 2027 if there is no new exploration or major investment in the sector, government documents seen by Reuters showed.

A steep decline in oil revenue, a lifeline for the Kurdish Regional Government, would compound the economic woes of a region already struggling financially within an unstable Iraq, diplomats, officials, and energy experts said.

According to the documents, the Kurdistan Region in Iraq’s oil output could rise to 580,000 barrels per day in five year’s time under a scenario in which investment is fully optimized, leaving 530,000 bpd available for export.

But without new investment, the semi-autonomous region might only have 240,000 bpd available to export as older wells become depleted, the documents, which have not previously been reported, show.

“It is very dangerous,” said KRI parliamentarian Karwan Gaznay, who is a member of the region’s oil and gas committee.

“We should be alarmed by it, but it will not be a real issue if we sort out our problems with the Iraqi government, then Kurdistan can develop new blocks and increase production. We have a lot of reservoirs,” he said.

The KRG did not respond to a request for comment.

Under the Iraqi constitution, the region is entitled to a portion of the national budget. But the arrangement collapsed in 2014 when the Kurds seized control of Iraq’s main northern oilfields in Kirkuk from Islamic State and began selling crude from there independently.

In 2018, Iraqi forces retook disputed territories, including the oil city of Kirkuk, and Baghdad resumed some budget payments but they have been sporadic.

So far this year, it has sent two payments of 200 billion Iraqi dinars ($137 million).