BAGHDAD, June 28 (UPI) -- The Iraqi Oil Ministry is expected to decide within months what its energy strategy will be for the next 17 years, while building up the infrastructure it will need for vastly expanded oil and gas production aimed at transforming the country into a major energy power.
The blueprint, known as the Integrated National Energy Strategy and 18 months in the making, calls for sector investment of $620 billion until 2030 in a country still struggling for stability more than a decade after the U.S.-led invasion of March 2003.
That's the equivalent of about five years' Iraqi oil revenues at current oil prices of more than $90 a barrel. The INES projects oil and gas will bring in as much as $6 trillion in revenue during the period cited.
The 350-page blueprint was drawn up by the Oil Ministry, with the electricity, planning and finance ministries, the World Bank and the U.S. consultants Booz & Co.
It's not yet been published in its final form, but an initial outline unveiled by the government two weeks ago, with some details filled in by senior officials, indicated the government will sharply reduce the high oil production targets the Oil Ministry set several years ago.
That plan envisioned boosting output, which was then around 1.5 million barrels per day, to 10 million-12 million bpd by 2017, challenging Saudi Arabia as the world top producer. Oil industry executives and analysts deemed that to be wildly ambitious, far beyond the capabilities of the Iraqis.
The originator of that plan was the then-oil minister, Hussein al-Shahristani, a former nuclear scientist imprisoned by Saddam Hussein because he refused to join the late Iraqi dictator's drive to develop nuclear weapons.
Shahristani is currently deputy prime minister for energy affairs and presumably helped draw up the INES, which sets out three targets for the short, medium and long terms that are markedly lower than those in Shahristani's original plan.
With current production at 3.2 million bpd, the government must decide on output levels between now and 2030.
In the short term, Iraq seeks to boost production to 4.5 million bpd by next year, and then increase that to 9 million bpd by 2020, or 157 percent above the current level.
That would put Iraq -- which sits on the world's fourth-largest proven reserves of conventional crude with 150 billion barrels -- up there with the top three producers, Saudi Arabia, Russia and the United States.
Most analysts agree the Iraqi blueprint, while throwing out the pie-in-the-sky targets of Plan Shahristani, faces roadblocks, including arranging for $620 billion in investment while the country shows signs of breaking apart in a new sectarian bloodbath following the U.S. military withdrawal in December 2011.
Another obstacle is Iraq's notoriously fractious parliament, which has yet to be presented with the INES for its approval.
The 325-seat assembly does not have a good record on energy issues. An oil law designed to regulate the industry and define revenue-sharing between the regions, has languished in parliament since 2007, with no sign that it will ever reach the statute book.
Meantime, the lack of such legislation has caused widespread friction, particularly between the independence-minded Kurds in their oil-rich, semiautonomous enclave in northern Iraq and the central government in Baghdad.
As analyst Adal Mizra of the Middle East Economic Digest observed, the listed financial returns expected from expanded oil production "are dependent on a raft of assumptions, the most critical of which is Iraq's security situation."
"To reach the levels of investment planned, Iraq would have to rapidly become one of the most attractive destinations in the world for investors, an unlikely prospect in the medium term, Mizra said. "The new energy strategy has been hailed as a critical step for Iraq, but it needs the right government and Oil Ministry to deliver it."
Finally, there's the question of whether the global oil market will be able to absorb the greatly increased output Baghdad envisions. Future demand for oil from the Organization of Petroleum Exporting Countries, including Iraq, doesn't look good because of the massive increase in oil production, thanks to shale oil.