Through its 80 known oil fields, Iraq is estimated to have almost 10% of the world's proven reserves (143 billion barrels) and 2% of the world’s natural gas reserves, making it the largest EITI implementing country by oil and gas reserves. The Rumaila and West Qurna fields together hold more proven oil reserves than the entire United States. According to the International Energy Agency, Iraq has the potential to earn USD 5 trillion in oil revenues between 2013 and 2035. For the same time period, it is estimated that Iraq will provide 45% of global production growth and become the world's second largest exporter of oil. Internal conflict and cut-backs in investment due to low oil prices are among the factors hampering Iraq's ability to reach this potential.
In Baghdad-administered Iraq, the industry is completely state-owned, with the oil marketing company SOMO selling crude to 40 accredited international companies on behalf of four producing companies, South Oil Company, North Oil Company, Missan Oil Company and Midland Oil Company. According to the latest IEITI Report, over 2.1 million barrels per day were produced in 2014. The eleven international Technical Service Contracts (TSCs) that have been signed hold the promise of a total production of over 13 million barrels per day. If this figure were ever achieved, Iraq would become the largest oil producer in the world. The current goal of the Ministry of Oil is to reach a production capacity of 7 million barrel per day by 2020.
The semi-autonomous Kurdish Regional Government (KRG) has a series of production sharing agreements with international companies.
All officially exported oil from Iraq, including from Kurdistan, goes through the Iraq-Turkey pipeline with ports at Basra and Ceyhan (in Turkey). Any oil in that pipeline is the property of SOMO, the Iraqi state-owned oil company. (Source EITI 2018)
Iraq's GDP growth slowed to 1.1% in 2017, a marked decline compared to the previous two years as domestic consumption and investment fell because of civil violence and a sluggish oil market. The Iraqi Government received its third tranche of funding from its 2016 Stand-By Arrangement (SBA) with the IMF in August 2017, which is intended to stabilize its finances by encouraging improved fiscal management, needed economic reform, and expenditure reduction. Additionally, in late 2017 Iraq received more than $1.4 billion in financing from international lenders, part of which was generated by issuing a $1 billion bond for reconstruction and rehabilitation in areas liberated from ISIL. Investment and key sector diversification are crucial components to Iraq’s long-term economic development and require a strengthened business climate with enhanced legal and regulatory oversight to bolster private-sector engagement. The overall standard of living depends on global oil prices, the central government passage of major policy reforms, a stable security environment post-ISIS, and the resolution of civil discord with the Kurdish Regional Government (KRG).
The desert regions have poorly developed soils of coarse texture containing many stones and unweathered rock fragments. Plant growth is limited because of aridity, and the humus content is low. In northwestern Iraq, soils vary considerably: some regions with steep slopes are badly eroded, while the river valleys and basins contain some light fertile soils. In northwest Al-Jazīrah, there is an area of potentially fertile soils similar to those found in much of the Fertile Crescent. Lowland Iraq is covered by heavy alluvial soils, with some organic content and a high proportion of clays, suitable for cultivation and for use as a building material.
Salinity, caused in part by over irrigation, is a serious problem that affects about two-thirds of the land; as a result, large areas of agricultural land have had to be abandoned. A high water table and poor drainage, coupled with high rates of evaporation, cause alkaline salts to accumulate at or near the surface in sufficient quantities to limit agricultural productivity. Reversing the effect is a difficult and lengthy process.
Heavy soil erosion in parts of Iraq, some of it induced by overgrazing and deforestation, leaves soils exposed to markedly seasonal rainfall. The Tigris-Euphrates river system has thus created a large alluvial deposit at its mouth, so that the Persian Gulf coast is much farther south than in Babylonian times.
Laws and Regulations
Iraq's natural resources are governed by a uniquely centralized structure where the government through the Ministry of Oil owns, produces, transports, sells and accounts for all the oil produced and exported or used domestically. Article 111 in the Iraqi Constitution sets the legal foundation for the development of the sector, noting that "oil and gas are owned by all the people of Iraq in all the regions and governorates.” Article 112, calls for a balanced distribution of oil revenues throughout the country to be regulated by a specific law. In the absence of said law, Article 110 gives the Federal Government exclusive authority to determine foreign sovereign economic and trade policy, in addition to “regulating commercial policy across regional and governorate boundaries within Iraq.”
In the absence of a law as prescribed by Article 112 of the Constitution to determine a national energy strategy, a series of short term agreements were made between 2009 and November 2014 to govern the relationship between the Federal Government and the KRG in terms of oil and gas production. There is currently no law regulating private investment in solid minerals.
The fiscal framework is correspondingly limited to a corporate income tax for International Oil Companies operating under so-called Technical Service Contracts that shall not exceed 35% of the remuneration they receive for their services. This is specified in the Technical Service Contracts used in Iraq's four licensing rounds to date. (Source EITI 2018).
No information has been provided.