Iraqi oil-reserve potential ‘could exceed’ Saudi Arabia’s

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Taking part in a panel discussion on the second day of the SALT conference in Abu Dhabi (second from left to right): Majid Jafar, Crescent Petroleum’s CEO, R. J. Johnston, executive adviser and managing director for global energy and natural resources at Eurasia Group, Francisco Blanch, global head of commodities research at Bank of America Merrill Lynch. (AN Photo/Huda Bashatah)
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The discussion took place on the second day of the SALT conference in Abu Dhabi. (AN Photo/Huda Bashatah)
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The discussion took place on the second day of the SALT conference in Abu Dhabi. (AN Photo/Huda Bashatah)
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The discussion took place on the second day of the SALT conference in Abu Dhabi. (AN Photo/Huda Bashatah)
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The discussion took place on the second day of the SALT conference in Abu Dhabi. (AN Photo/Huda Bashatah)
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Updated 12 December 2019

Iraqi oil-reserve potential ‘could exceed’ Saudi Arabia’s

  • Crescent Petroleum’s CEO Majid Jafar told SALT conference Iraq's production has risen despite obstacles
  • 'Improving investment climate for private sector essential' to utilize Iraq's full energy-sector potential

ABU DHABI: Iraq’s oil reserves had the potential to exceed those of Saudi Arabia, a top Middle East energy company chief has told the region’s first SALT conference.

In spite of years of corruption, a lack of infrastructure, and the five-year war on Daesh in Iraq, the country had managed to increase its production of oil from 1.5 million barrels per day (bpd) to 5 million, Crescent Petroleum’s CEO Majid Jafar revealed.

Speaking in Abu Dhabi on a panel session discussing power dynamics in the energy sector, he addressed Iraq’s position on oil production and the US’ recent move toward energy “independence.”

Referring to the rate of Iraq’s oil production today, he said: “This gives you some indication of the reserve potential in Iraq, which I believe can exceed Saudi Arabia’s.” And he added that parts of the country still remained “unexplored.”

To utilize the country’s full potential in the energy sector, he believed that improving the investment climate for the private sector was essential.

Jafar said this could be achieved by addressing the demands voiced in recent protests lead by Iraq’s youth, adding that “young people have had enough.”

Among their demands were the need for better services, electricity, employment opportunities and a governing system free of corruption and sectarian politics.

Yet, despite the instability, Crescent Petroleum was still optimistic. “As a group, we have invested $3 billion (SR11.25 billion) over the last 10 years, and the rate of investment is increasing going forward.”

Jafar pointed to the Middle East and North Africa region’s steep oil wealth, implying that more could be done to raise competition in the global energy market. He cited new reforms, such as Saudi Aramco’s partnership with the private sector, as a step in the right direction, considering that the region was home to five of the top 10 oil-producing countries.

However, he highlighted that in recent times the Middle East oil and gas industry had given up a significant amount of its market share to its American counterparts.

While the US moved toward “self-sufficiency,” Jafar believed the country’s “inter-dependence” would grow.

“Being an exporter of oil, you start to worry about the markets,” he said, making a projection on the impact of recent changes on the US economy. “With the US becoming one of the biggest producers in the world, its economy in terms of overall GDP does better if the oil prices are higher, and that changes all the calculations.”

Dr. Francisco Blanch, global head of commodities research at Bank of America Merrill Lynch, highlighted that while the US had become “energy independent,” investors had lost a significant amount of funds to “supply the capital to make it happen.”

Blanch’s forecast was that the US would not continue to grow at the pace it had been doing in recent years. “I think investors are waking up to realize that Shell is a marginal-cost business.”

Supporting Jafar’s observations, he agreed that the US had become more interdependent on exports and imports. He pointed out that today, the US imported 6.5 million barrels of oil, and exported 2.5 million bpd.

“I think the capital market has become more skeptical about capital being allocated to the energy sector,” said Blanch, adding that the next five to 10 years would witness a focus on technology and healthcare.

Examining the geopolitical situation in the Arab region, panelist R. J. Johnston, executive adviser and managing director for global energy and natural resources at Eurasia Group, described the energy sector as a “geopolitical-driven story.”

He cited the drone and missile attacks earlier this year on two Saudi Aramco oil sites in the Eastern Province, pointing out the disruptions in supply did not generate an expected response and impact on oil prices.

“This maybe suggests something about how the geopolitics of the region are changing. Even with sanctions on Iran and the attack against the Aramco facilities, the world is more focused on a different kind of geopolitics; more on the demand side,” said Johnston.

He also referenced the upcoming US elections as well as other problematic structural trends in the region and around the world, such as the protests seen in the Middle East, Western Europe, and Hong Kong, as factors that created uncertainty for the growth of the global market.

He added that in the age of US President Donald Trump, America was “less committed to the region” than it had been in the past, a situation that would create a new set of realities.
 


British MPs urge UK government to recognize Palestine

Updated 22 January 2020

British MPs urge UK government to recognize Palestine

  • Palestinian envoy welcomes cross-party call ahead of visit by Prince Charles

LONDON: A group of British MPs has called for the UK to recognize the state of Palestine ahead of a visit by Prince Charles to Israel and the occupied Palestinian territories.

In a letter to The Times, the MPs, along with figures from think tanks and pressure groups, said the move was long overdue and would help fulfill Britain’s “promise of equal rights for peoples in two states.” 

The call comes as the heir to the British throne travels on Thursday to Israel and the occupied West Bank. 

During the visit, he will meet Palestinian President Mahmoud Abbas in Bethlehem and Israeli President Reuven Rivlin in Jerusalem. 

Prince Charles will also attend the World Holocaust Forum to mark the 75th anniversary of the liberation of the Auschwitz concentration camp. 

The letter said since 2014, no meaningful progress has been made in the peace process, and Israel’s actions are pushing a two-state solution beyond reach.

“Illegal Israeli settlements, described by the Foreign Office as undermining peace efforts, are expanding,” the letter said.

Among the signatories are Emily Thornberry, a candidate for the Labour Party leadership, and Crispin Blunt, chairman of the Conservative Middle East Council.

Husam Zomlot, the Palestinian envoy to the UK, welcomed the move but said full recognition from the British government should have happened many years ago.

“Recognition doesn’t contradict peacemaking and negotiations,” Zomlot told Arab News, referring to the main argument used by the UK against taking such a step. 

“It reinforces the vision (of a Palestinian state) and a negotiated two-state solution. It should happen now because of the threat of annexation (of Palestinian territory) and the killing of the two-state solution.”

FASTFACT

Prince Charles will also attend the World Holocaust Forum to mark the 75th anniversary of the liberation of the Auschwitz concentration camp. 

Alistair Carmichael, a Liberal Democrat MP who signed the letter, told Arab News that the policies of Israeli Prime Minister Benjamin Netanyahu’s government toward Palestine “makes the achievement of a two-state solution more and more remote with every week that passes.”

He said: “The UK has historic and political obligations toward Israelis and Palestinians. There’s now no longer any good reason not to recognize the state of Palestine.”

A spokesman for Labour MP Fabian Hamilton, who also signed the letter, told Arab News: “The fact that this has cross-party support shows the growing desire across Parliament for the recognition of a Palestinian state and a two-state solution.”

Chris Doyle, director of the Council for Arab-British Understanding, said the international community needs to finally stand up for the solution that it has had on the table for decades.

Doyle, an Arab News columnist, said the letter is an “indication that many people in British politics think we should be doing this, we should be standing up for the Palestinian right to self-determination, the legal rights, at a time when the state of Israel is doing everything to stop this, to take more land from the Palestinians.”

The letter was timed to coincide with a meeting of European foreign ministers on Monday, who discussed the Middle East peace process.

The Palestinian Authority, which runs parts of the West Bank, has been increasing calls for European countries to recognize the state of Palestine as the US has shifted to a more pro-Israel stance, including recognizing Jerusalem as Israel’s capital in 2017.

Writing in The Guardian on Monday, Saeb Erekat, secretary-general of the Palestine Liberation Organization, said Europe could strengthen its role in the peace process if it recognized Palestine.

“European recognition of this state is not only a European responsibility but a concrete way to move towards a just and lasting peace,” he said.

Only nine out of the 28 EU countries have so far recognized Palestine as a state, compared to 138 out of the 193 UN member states.

In 2011, the UK’s then-Foreign Minister William Hague said the British government “reserves the right” to recognize Palestine “at a time of our own choosing, and when it can best serve the cause of peace.”

In 2012, the UN General Assembly voted to upgrade Palestine’s status to that of “nonmember observer state.”