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LONDON, March 27 (Reuters) - Iraq's oil output and capacity may peak following growth of around 25% over the next five years, analysts said, falling short of 2027 targets and ending a long-standing ambition to rival the output of top OPEC producer Saudi Arabia.

Political infighting has cost Iraq the opportunity to invest in growing output more quickly. As the energy transition gathers pace, it means Baghdad may never be able to cash in the hundreds of billions of barrels it has in the ground, even with the efforts of the country's new energy minister to attract investment.

Since 2016, Iraq's output has stalled at around 4.5 million barrels per day (bpd).

Before then, capacity grew rapidly as the government opened up the sector in 2009 and international oil companies revamped the country's biggest oilfields.

Growth slowed in part because Iraq agreed to cap output under supply policy agreed with the Organization of the Petroleum Exporting Countries (OPEC) and allies, a group known as OPEC+.

Iraq's Oil Minister Hayan Abdel-Ghani, who took office in October, plans to update Iraq's oil production strategies to meet local needs while complying with the OPEC+ agreement, oil ministry spokesman Asim Jihad told Reuters.

It is too early for the new government to talk about any significant increases in Iraq's oil production outside the OPEC+ agreement, Jihad said. Under the agreement, Iraq's production target is 4.43 million bpd until December.

As a result, Iraq has shifted focus to the refining and gas sectors and lowered capital expenditure in the oil sector, analysts at FGE consultancy and Rystad Energy told Reuters.

For the oil sector, the country has repeatedly delayed a target to reach 7-8 million bpd capacity, from the current 5 million bpd. The previous government said last year it hoped to reach the higher levels by 2027.

Some energy industry consultancies forecast that Iraq may never reach them.

Capacity would peak and plateau at 6.3 million bpd by 2028 before declining, Iman Nasseri, managing director for the Middle East with FGE consultancy, said. Politics, security and the investment environment were all contributing to prevent Iraq from pushing output higher than that, he said.

"We think Iraq's current target looks hard, if not impossible to achieve," Nasseri said.

Rystad Energy expected production to be limited to 5.5 million bpd by 2027 as a result of midstream growth limitations and because projects that are crucial to boosting output are stuck.

Two decades after the war began, the current targets and the even lower forecasts are far off Iraq's post-war goal to take capacity to 12 million bpd.

The ambition was scaled back in 2012 after international oil companies operating in Iraq negotiated lower output targets for their fields because of low recovery factors, high natural decline rates and because Iraq was not investing enough in infrastructure, analysts said.

The major oil companies had also hoped Baghdad would improve the terms of technical service contracts (TSCs). That never happened, and companies such as ExxonMobil Corp (XOM.N) and Royal Dutch Shell Plc left.

Analysts and industry insiders say the problems are above the ground rather than in the geology below, which has significant unexplored capacity, and include repeated changes to government, political infighting and red tape.

Successive governments failed to sign off on Iraq's fifth licensing round in 2018. Six deals out of eleven oil and gas blocs on offer were eventually signed at the end of February, marking long-awaited reforms to the conditions of operating in the country.

The beneficiaries were not the international oil companies, but UAE firm Crescent Petroleum and two Chinese companies.

A source close to the Iraq energy industry who could not be named because they were not authorised to speak to the press said the contracts awarded pay royalties upfront and link revenues to oil prices.

Abdel-Ghani's decision to sign the deals four months after his appointment may show a new resolve in government to cut deals more attractive to international energy companies, the source said.

Still other issues remain.

A large-scale seawater treatment project needed to boost output at the southern oilfields through water injection, has been stalled for over a decade because of haggling over terms.

French oil major TotalEnergies is the latest to take on the project as part of a $27 billion deal to build four oil, gas and renewable projects over 25 years.

TotalEnergies CEO Patrick Pouyanne said this month contractual disagreements were unresolved.

"Iraq is not the easiest place to invest with all risk," Pouyanne said.

The water project would boost output at the five Iraqi fields by 2 mln bpd of the 2.4 mln bpd growth needed to reach Iraq's 2027 targets, according to Rystad data and Reuters research.

But completion before 2027 is unlikely, Rystad's vice president of Middle East upstream research Aditya Saraswat said.

Iraq's oil minister this month revived seven investment opportunities in Iraq's refining sector.

Even if Abdel-Ghani manages to find companies interested in those projects, Iraq's refining potential only allows 500,000 bpd of crude output growth and this would take time, Saraswat said.

Meanwhile, Iraq's southern export capacity has stalled at around 3.2-3.3 mln bpd for the last year following delays to infrastructure upgrades at its Gulf ports, data from state-owned marketer SOMO showed.

Reporting by Rowena Edwards in London, Maha El Dahan in Dubai, and Ahmed Rasheed in Baghdad; Editing by Simon Webb and Barbara Lewis

Our Standards: The Thomson Reuters Trust Principles.

See the original post:
Analysis: Iraq's ambition to match Saudi oil output is out of reach - Reuters

An international arbitration court has ruled against Turkey in a long-running dispute with the Iraqi government regarding crude oil exports from the autonomous Kurdistan region, two Turkish sources familiar with the issue, but not authorised to speak to the press, told Middle East Eye.

The Iraqi oil ministry in a separate statement on Saturday welcomed the favourable ruling from the International Court of Arbitration that had been issued on Thursday, saying that the judgement confirmed that Iraqi national oil company SOMO is the only entity authorised to manage oil export operations through the Turkish port of Ceyhan.

The ministry said that it would discuss mechanisms for exporting Iraqi oil through the Ceyhan port, both with the Turkish government and the Kurdistan Regional Government (KRG) in Iraq, in a way that would guarantee the continuation of shipments.

Iraq sued Turkey nearly nine years ago due to an oil deal between Ankara and Erbil concerning exports through the Kirkuk-Ceyhan pipeline. Iraq maintained for years that the Iraqi Kurdistan region doesn't have any authority to make energy exports without Baghdad's consent.

One source familiar with the lawsuit told MEE that Iraqi authorities demanded $33bn from Turkey for the damage, but couldn't get that amount. The source added that Turkey was ordered to pay Iraq $1.4bn to cover the 2014-2018 period.

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A second source said that Turkey was comfortable with the ruling since the penalty was much lower than initially expected. The source added that bilateral negotiations to resolve the issue between Turkey and Iraq were underway and would continue next week.

"Turkey will make sound legal arguments and eventually will only pay half of $1.4bn," the source predicted.

Iraqi local media reported that Turkey halted the pumping of Iraqi crude oil through Ceyhan on Saturday morning. Iraq had been pumping 370,000 barrels of KRG crude and 75,000 barrels of federal crude through the pipeline per day before it was halted, according to sources talking to Reuters.

An industry insider said Ankara was making around $1bn as a transit country thanks to Iraqi shipments.

Iraq's federal court also ruled last year that the law regulating the oil industry in Iraqi Kurdistan was unconstitutional, and demanded that Kurdish authorities hand over their crude supplies.

Over one million barrels per day, roughly one percent of global supplies,passed through the Ceyhan terminal in January, according to data compiled by Bloomberg.

Read more from the original source:
Turkey ordered to pay $1.4bn to Iraq in Kurdistan oil arbitration case - Middle East Eye

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Originally posted here:
Iraq wins landmark case against Turkey over Kurdish oil exports - Financial Times

The final vote to end two Iraq war authorisations clears a key procedural hurdle, as the Senate decides to limit debate.

The United States Senate has backed a measure expected to clear the way for a vote to repeal two authorisations for war in Iraq.

On Monday, the chamber voted 65 to 28 to limit debate over whether to end two Authorizations for Use of Military Force (AUMFs) one from 1991 that coincided with the Gulf War and a second from 2002, approved in the lead-up to the 2003 Iraq invasion.

That support exceeded the 60-vote minimum needed to advance the legislation. The final vote to repeal is expected later this week.

Mondays vote takes place as the US marks the 20th anniversary of the 2003 Iraq War. All 28 votes against Mondays measure came from Republican Senators.

Typically, under the US Constitution, Congress wields the exclusive power to declare war. But with the two Iraq war authorisations, Congress granted open-ended authority to the presidency to exercise force in the region.

That, some argue, has allowed the presidency to gain too much power over military action. It has also spurred criticism that these zombie authorisations have fuelled forever wars that are no longer justified.

In the minutes before Mondays vote, Democratic Senator Bob Menendez of New Jersey called the measure a means of exercising the chambers most solemn duty: to decide when and under what circumstances to send Americans into harms way.

It is a recognition that Congress not only has the power to declare war but also should have the responsibility to end wars, Menendez said in his speech, urging his fellow Senators to approve Mondays measure.

Menendez also blasted the war authorisations as obsolete and outdated. He argued that US President Joe Biden has sufficient authority to defend against threats without them, pointing to recent military air raidsin Syria.

If were going to debate whether to provide the president additional authorities, then we should have that debate separately. But it should not be under the cloak of keeping old authorisations on the book, authorisations that are not needed to meet any current threat, Menendez said.

But several of his Republican colleagues in the Senate took to the floor to argue in favour of retaining the Iraq war authorisations, on the basis that a repeal might limit the USs ability to take action in the Middle East.

Texas Senator John Cornyn, for instance, asserted that while the political situation in Iraq has changed, the threats to US interests remained. He also cited Iraqi security as a motivation.

American forces are no longer there to counter threats from Iraq. We are now there to counter threats to Iraq. That includes threats from Iran, the number-one state sponsor of international terrorism, Cornyn said in his speech.

Despite the fact that Iraq is now our partner, that doesnt mean its time to abandon our security interests in the region. America still has very real adversaries in the Middle East who would do us and our allies harm if they go the chance.

South Carolina Republican Lindsey Graham, meanwhile, delivered a fiery speech saying that repealing the war authorisations would embolden US adversaries.

Heres what youre doing. Youre sending the signal by doing this that were leaving. Were withdrawing. That we dont have the will as a nation to see this thing through. Theres nothing good that comes from this, he said, ending his speech by calling the prospect of a repeal one of the most ill-conceived ideas after 9/11.

On Twitter after the vote, Senate Majority Leader Chuck Schumer announced that the chamber would vote on the final passage of the repeal later this week.

Americans want to see an end to endless wars in the Middle East, he wrote.

Go here to read the rest:
US Senate votes to advance repeal of Iraq War authorisation - Al Jazeera English

U.S marines and Iraqis are seen on April 9, 2003, as the statue of Iraqi dictator Saddam Hussein is toppled at al-Fardous square in Baghdad. Wathiq Khuzaie/Getty Images hide caption

U.S marines and Iraqis are seen on April 9, 2003, as the statue of Iraqi dictator Saddam Hussein is toppled at al-Fardous square in Baghdad.

In the coming weeks, both chambers of Congress are expected to debate and vote on a bill repealing the authority that Congress gave President George W. Bush to use force against Iraq.

It has been more than half a century since Congress repealed a similar resolution. That was the Gulf of Tonkin Resolution of 1964, which had allowed then-President Lyndon Johnson to escalate the conflict in Vietnam.

That war ultimately cost more than 55,000 American lives and many times that many Vietnamese lives, destabilizing the entire region.

We will return to that precedent in a moment. For now, Congress is focused on the fallout from its decision to greenlight a war with Iraq in October 2002. The U.S. and its allies invaded and occupied Iraq the following March. It was 20 years ago this month.

There was no declaration of war against Iraq, although the Constitution gave that power to Congress in its Article I. Congress has not declared war on anyone since 1942, nor has any president asked it to. But there have been long and bloody wars in Korea, Vietnam, Afghanistan and Iraq not to mention hundreds of strikes using drones, missiles and "special forces" (the exact number is not known).

By repealing its 2002 authorization for the war in Iraq, Congress may hope to reassert more control on the war-making decisions of the executive branch. That is the goal, at least, of many on Capitol Hill.

One of repeal's principal sponsors in the Senate is Virginia Democrat Tim Kaine. He says the 2002 authorization (and another granted to President George H.W. Bush in 1991 prior to the Persian Gulf War) "are no longer necessary, serve no operational purpose, and run the risk of potential misuse."

Congress has tried to stand up to presidents in previous eras, as the struggle between the branches is built into the nation's founding documents. But Congress has been weakened in this struggle by events over a long period of time and more recently by dramatic events in real time.

Congress has often been complicit in allowing the executive leeway for military adventures, dating back at least to Thomas Jefferson's forays against pirates in the Mediterranean in the early 1800s.

But the expansion of presidential war-making accelerated literally in a flash on Sept. 11, 2001, when hijacked airliners smashed into the World Trade Center and the Pentagon. Nearly 3,000 lives were lost, exceeding even the death toll from the Japanese attack on Pearl Harbor that propelled the U.S. into World War II.

Sept. 11, 2001, galvanized Americans much as Pearl Harbor had. Americans were fearful, and also vengeful. The awfulness of the Twin Towers collapsing and the grief of thousands of families who lost loved ones turned swiftly to anger. There were popular songs on the radio and rants on TV about what the U.S. would do in retribution. Just three days after those attacks, Congress met and passed an authorization for the use of military force, or AUMF, directing President Bush to go after the perpetrators and those who harbored or enabled them.

That covered the invasion of Afghanistan that fall and has been used by every president since for scores of operations many still secret. It is important to note that the 2001 AUMF against terrorists would remain intact under the current Senate's repeal bill; the measure would apply only to the later resolution aimed specifically at Iraq and an 1991 AUMF concerning Iraq's invasion and occupation of neighboring Kuwait.

The second wave of combat helicopters of the 1st Air Cavalry Division fly over an RTO and his commander on an isolated landing zone during Operation Pershing, a search and destroy mission on the Bong Son Plain and An Lao Valley of South Vietnam, during the Vietnam War. The two American soldiers are waiting for the second wave to come in. Patrick Christain/Getty Images hide caption

The Iraq resolution came 13 months after Sept. 11. The initial thrust into Afghanistan had ousted the Taliban regime but failed to capture al-Qaida leader Osama bin Laden. The Bush administration increasingly turned its attention to the regime of Saddam Hussein. While never explicitly saying Saddam had aided in the Sept. 11 attacks, Bush and his national security strongly implied it.

"Iraq continues to flaunt its hostility toward America and to support terror," Bush told Congress in January 2002. "... The Iraqi regime has plotted to develop anthrax, and nerve gas and nuclear weapons."

Bush also asked Congress to "imagine those 19 hijackers [on Sept. 11. 2001] with other weapons and other plans, this time armed by Saddam Hussein." Just before the AUMF of 2002 was debated, national security adviser Condoleezza Rice warned the U.S. could not wait to find "a smoking gun" because it might be "a mushroom cloud."

So the Iraq AUMF was approved by a vote of 296-133 in the House and 77-23 in the Senate. Only six Republicans voted no in the House and just one in the Senate. A majority of Democrats in the House were opposed (126-81). But in the Senate, the majority of Democrats voted yes (29-21). There was one Independent vote against the resolution in each chamber.

In all this, the trajectory of the Iraq War as an issue in domestic politics tracked the precedent set by the Vietnam War.

The Tonkin Resolution was named for a bay on the Vietnamese coast where torpedo boats were alleged to have attacked U.S. warships. Johnson persuaded Congress the national honor was at stake and Vietnam was the key to stopping the advance of global communism. Congress passed a resolution saying he could "take all necessary measures" to protect U.S. interests in Vietnam. The House voted unanimously for it, and only two members of the Senate opposed it.

In 1970, the Senate vote to repeal it was 81-10. (The lopsided vote for Tonkin in 1964 was nearly matched by the vote for the September 2001 AUMF against terrorists, which had one House member, Democrat Barbara Lee of California, opposed and two senators not voting.)

Back in 1964, Johnson had his Tonkin authority and public support (he won a full term in the White House that November with 60% of the popular vote). Soon, he was escalating the war until half a million U.S. personnel were in Vietnam. Draft orders soared, protests proliferated, and support on Capitol Hill deteriorated.

Although popular at first, Johnson's war became an albatross. He aborted his bid for a second elected term in 1968.

Two years later, Johnson's Republican successor Richard Nixon was trying to wind down U.S. involvement in Vietnam and did not want to defend the Tonkin resolution. The leaders in both parties in Congress were ready to have it off the books so as to assert more oversight on presidential war-making.

Attempts in that direction were made in the years that followed, including the passage of the War Powers Resolution in 1973. But presidents continued to find ways around Capitol Hill in the decades to come, especially after the life-changing experience of Sept. 11, 2001.

Any comparison to Vietnam seemed far-fetched when Congress went along with Bush on Iraq in 2002. The initial invasion was successful: Baghdad fell and the Iraqi dictator Saddam Hussein went into hiding (later to be captured, tried and executed).

But the occupation that followed was awkward at best, breeding far greater resistance among Iraqis than Bush administration planners had expected. Even those glad to be rid of Saddam chafed at the presence of a foreign army. presence.

Over time, support waned back at home, as well. The war paid the U.S. no visible dividends and made no new friends. Multiple polls measured support above 70% in the month of the invasion, but below 50% by the summer of 2004. It has remained under water ever since.

While Bush survived to be reelected in 2004, he came close to losing in the Electoral College. He had the protection, too, of noting that his Democratic opponent John Kerry, a Democratic senator from Massachusetts, had voted for the Iraq authorization as had Kerry's running mate John Edwards of North Carolina.

But two years later, Democrats stormed to majorities in both chambers of Congress in 2006 for the first time in 12 years. The central issue that year: the Iraq War.

Early in 2007, as debates began among Democratic candidates for president and first-term Sen. Barack Obama used his opposition to the Iraq War as an Illinois state legislator to set himself apart from more experienced Senate colleagues especially putative frontrunner Hillary Clinton of New York.

More than a few observers at the time noted that without that Iraq vote, Obama would not have had an actual issue to use against Clinton.

Just as Obama had made Clinton pay for her 2002 vote on Iraq, Trump used it to question her judgment in the 2016 fall campaign. Trump himself had expressed ambivalence about the Iraq War on several talk shows when it began, but he later claimed to have been against it before it even began. He has also later classed it among the "forever wars" the U.S. should never have fought.

Vermont Sen. Bernie Sanders, an independent running for president in 2016 and again in 2020, called the Iraq War "the worst foreign policy blunder in U.S. history." He himself had voted against the resolution in 2002 as a member of the House. But his effort to use the issue against Biden in the 2020 primaries was ultimately not successful.

As president, Biden has signaled the president would sign the repeal, which some in Congress have been pushing for years. The House passed a repeal bill in 2021 that did not get to the Senate floor. The sponsor of that House bill, as well as this year's successor version, was Democrat Barbara Lee of California.

Lee was the lone member of Congress to cast a vote against not only the 2002 Iraq resolution but also the previous AUMF against terrorists that cleared Congress three days after Sept. 11, 2001.

Originally posted here:
Congress revisits approval for Iraq invasion, recalling change of ... - NPR