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Lately, a blog published ‘Who is benefitting from declining oil prices’ indicated that the U.S. and Saudi Arabia had the lion share of the oil and gas trade. Now the need has been felt to provide the readers with an update on one of the latest developments. Lately, Iraq has emerged as one of the major oil exporters with the OPEC. With the Iraqi economy slowly regaining its standing in the global market, some of its oil-rich fields have registered increase in output, which is likely to have substantial impact on the oil market in general.
In the recent past North Rumaila region of Iraq was controlled by insurgents who had infiltrated the oil fields and forced oil companies to withdraw from the regions, which had a severe negative impact on the Iraqi economy. Only recently, when the insurgents were pushed away to the northern parts of the country, some of the leading global oil companies in the world felt that it was safe enough to return to the Rumaila region.
With oil currently selling at approximately $50 a barrel because of the monopolization of the market by two of the world’s superpowers, many welcome this resurgence to balance out the market. With Iraq’s production expected to touch 6 million barrels per day by 2020 the country is expected to become one of the biggest exporters of oil in the world.
Major movements in the Rumaila region are instilling confidence of the longevity of operations in one of the most oil-rich areas in the world. Two leading oil companies Sulzer and Unaoil have recently announced a deal that will provide the region with significant support services. With the region still getting back to its feet, industry experts have lambasted the region because of the need for more workshops and adequate accommodation facilities for workers. The aforementioned deal between Unaoil and Sulzer will provide all of the above as well as a “single-point solution” for any rotator equipment failures to many of their partnered companies.
As the infrastructure and production levels continue to improve in the south of Iraq it will be interesting to see just how much is affects the global market. Whether it can force the price of oil per barrel down to new lows will remain to be seen if the supply outweighs the demand. Either way, the market will certainly make for interesting viewing up to 2020 especially if Iraq fulfills its rather bullish targets of 6 million barrels per day.