Reconstituting Iraq Oil Industry post Saddam

Reconstituting Iraq's Oil Industry post-Saddam . What would we like to see the Iraqi oil industry look like in five to ten years time? • Production volumes much greater than today • State of the art technology employed to expand ultimately recoverable volumes • Benefits flowing to individual Iraqis in as direct and equitable a manner as possible 2 What it might look post-conflict, in the event of sabotage? • Oil field production facilities aflame a Ia Kuwait 1991? • Pipelines (especially pumping stations) destroyed? 4 What it might look post-conflict, even without sabotage? • Enormous investment still required • $30-$50 billion good ballpark figure • Much upstream CapEx needed to revive production • Rule of thumb on Cap Ex; $1.50 (for some southern fields) to $3.00 (in the north and elsewhere) • Export outlets also critical: Controls, pumping stations required for ITP and Strategic capability (from south to north) • Potential Enterprise Value of Iraq oil industry: $250 billion to $750 billion • Problem: INOC capital investment has always come from internally generated cash flows 5 Existing Debt obligations • Existing foreign debts, nominally $50-60 billion - $40 billion to Saudi/Kuwait - $5-10 billion to Russians - $5 billion to French - $5-$10 to others, banks • Crippling ? • Iraqi debt capacity could be expanded somewhat via oil price hedging 6