Your Highnesses, Excellencies, Ladies and gentlemen, fellow colleagues.
Many thanks to the government of the UAE and Abu Dhabi for their worm welcome and hospitality. The leadership and brotherly people of the UAE have stood by Iraq through all the difficult times , and this we deeply appreciate , It is a privilege for me to be here with you today in Abu Dhabi to share a few of my thoughts on what`s bound to be an important year for the crude oil market . We have had to deal with difficult and challenging years after the collapse of the crude oil price from a peak of ($115) per barrel in June 2014 to under ($ 35) at the end of February 2016. This has been one of the most important global macroeconomic developments of the past 2 years. In Iraq the situation for us was further exasperated by terrorism and our fight to liberate our lands from the brutes of Daesh.
The latest agreement between the OPEC members to introduce a certain cut in their respective shares of the crude oil market is a positive step in order to balance the market and stabilize the oil price. Other important non-OPEC producers supported this move from inception. Iraq, committed to its ensuring a positive outcome to the discussions, played a major role in this agreement, and accepted to its share of the decrease. even though Iraq should have been exempted from the production cut due to the extenuating circumstances the country is going though , From fighting terrorism and Daesh , to rebuilding the infrastructure and desperately needed hospitals and schools , Iraq`s situation is unparalleled amongst the OPEC countries . We are in a desperate need for revenue to alleviate the pain of Iraqi people are suffering on a daily basis.
Furthermore, the determination of Iraq`s production cut was not based on the country`s official production level. Which includes the production from Iraqi Kurdistan Region, but was based on other statistical and compiled production figures.
This resulted in a larger production cut for Iraq, effectively reducing the revenue further for the country.
However, across all these hurdles, Iraq participated positively in the agreement, meanwhile sustaining and targeting to build up production capacities. As for exports, both of Iraq`s light and heavy oil streams continue to perform well to satisfy the country`s marketing commitments. Iraq has also made good progress in reduction of gas flaring, and has successfully made its first ever shipments of LPG, paving the way for future growth in the gas industry.
With regards to future investments in the petroleum sector , our aim is to improve and increase the country`s overall production capacity to compensate for opportunities the country lost during the past 25 years due to wars , sanctions and mismanagement by Saddam Hussein`s regime . Production facilities under the licensing rounds contracts are being rehabilitated and expanded in a timely manner, but there are so many other oil and gas fields in need of attention, as well as huge requirement for investment in midstream and downstream projects. The Ministry of Oil currently considers that a new oil field development tender may only be feasible after a thorough re-assessment has been completed of the legal, contractual, and commercial aspects, to achieve the appropriate market balance goals.
Regardings oil markets. 2016 has seen some major economic slowdown in prospective rising economies, heavier investments in reduction of the Carbon footprint, as well as marked global geopolitical instability. All these factors highlight OPEC`s production curtailment agreement as an acceptable step taken at the right time. We are already seeing that the crude oil price forecasts for 2017 are showing some stability, which is a positive step.
A fair and well-calibrated future balancing between supply and demand will lead to a new more favorable global energy security environment. These new norms require the introduction of revised legal and contractual works, as well as the design and adoption of effective but not crippling cost-cutting measures. Furthermore. Both resource owners and operators need to set better business model strategies, whereby cost-effectiveness can be achieved by avoiding broadening domains of activity, thus specializing in conduct of operations. But although the cost containment appears to be currently of prime importance, any advancement in market stability could very well bring us back to where we started before the downturn. As mentioned earlier, the Iraqi Ministry of Oil is currently addressing these requirements. We hope that all stakeholders, whether oil producers, international oil companies, and traders will work together in this respect to achieve the mentioned balance.
As for the Iraqi Ministry of Oil, we aim to achieve our primary goals as quickly and efficiently as possible. In addition to the strong will to improve the oil production and upgrade the overall petroleum infrastructure , the Ministry intends to make marked advances in gas utilization , and to get South Iraq seawater project up and running at a fast pace , because of its vitality to most envisaged future production from that area . Strong cooperation and partnership between the Ministry, its affiliate state companies and the private sector is of utmost importance to reach these targets. It will not be easy to achieve targets without the active participation of the private sector. We aim to continue fostering productive and effective working relationships with the international oil companies for the best interests of Iraq and to better align the contractual environment and smoothen and improve work procedures.
The Ministry of Oil is also targeting to reach a final accord with neighboring countries regarding the issue of the cross-border oil and gas fields, a matter that had been set aside for decades. The Ministry is also moving at a fast pace to bring up the credibility and work performance to qualify quickly to an excellent ISO-certification level. This is expected to result in far better workflow processes
As a final note, I extend my thanks to all the international oil companies that have participated effectively in developing the oil industry in Iraq, who were working in a rather difficult and challenging environment. We assure you that we are working hard to overcome these difficulties and to find better solutions.
Finally, I would also like to thank the Atlantic Council for inviting me to speak at this auspicious event. And I look forward to the panel discussion with my esteemed colleague.
Thank you all for your attention.