OPEC to add 11 mbpd capacity
Iraq to be top investor in capacity expansion; Saudi Arabia second
Posted: 07 August 2007
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OPEC is expected to add nearly 11 million barrels per day to its production capacity by 2020 and Iraq could be the top investor in these projects that will cost nearly $84 billion, according to an independent study.
 Between 2007 and 2010, capacity additions in the 12-nation Organisation of Petroleum Exporting Countries are projected at around 3.5 million barrels per day while they could soar to 7.5 million bpd between 2010 and 2020, said the study by the London-based Centre for Global Energy Studies (CGES).
“OPEC’s total incremental capacity between 2007 and 2020 will total around 11 million bpd,” said the study by CGES’s deputy director, Leo Drollas.
He estimated total investments in such projects at around $84 billion, excluding the cost of maintenance of the Cartel’s present output capacity.
A breakdown showed war-battered Iraq will be the biggest investor in OPEC as it is planning to restore its oil sector that has been badly damaged by the US-led invasion and the 1980-1988 conflict with neighbouring Iran .
Drollas’s figures showed investments in Iraq are estimated at around $16 billion, nearly of the total capital required by OPEC for capacity expansions.
The projects in Iraq will add 3.1 million bpd to its present capacity of nearly two million bpd, which is far lower than the pre-war production of 3.5 million bpd.
Saudi Arabia will add 1.8 million bpd by 2020 at a cost of $10 billion while investments were put at $seven billion in the UAE, $six billion each in Iran and Kuwait and around $ one billion in Qatar .
Outside the Gulf, the capital required until 2020 was estimated at $14 billion in Nigeria , $nine billion in Venezuela , $seven billion each in Libya and Angola and $one billion in Algeria . No investments were listed in Indonesia .
The report showed Iraq has the lowest cost in capacity expansion projects, standing at $5,000 per incremental barrel. It was followed by Saudi Arabia , at $5,500, Kuwait and Qatar at $6,000 and the UAE at $6,500. Angola has the highest cost per barrel, at around $15,000.
While such expansions in OPEC are expected to match the call on its crude in the specified period, there are doubts all the projects could be completed.
“The crucial questions are as follows,” Drollas said. “Will Iraq be peaceful enough to add 3.1 million bpd to its capacity by 2020; will Iran be able to invest $six billion or Nigeria find around $14 billion for its share of the development costs; or Venezuela invest $9 billion?” |
