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Monday, August 4, 2014

WILFREDO PEREZ POST: IRAQ CAN NOT CONTINUE WITH A CURRENCY WITH NO REAL VALUE, 4 AUGUST

Iraq can not continue with a currency with no real value by Wilfredo Perez

London - Iraq could overtake Russia as the second largest oil exporter in the world in 2035 for his potential if he can increase production more than doubled in that period, as predicted today the International Energy Agency (IEA). 

The IEA, which periodically assesses the energy market for its 28 Member States, says the Arab country has the resources to double production by 2020, up to 6 million barrels a day, and reaching more than 8 million barrels a day in 2035 . 

This would put him as the second largest exporter after Saudi Arabia, and in part will become "key" to global markets, as it would ensure the supply and bring stability to the risk of oil shortages and rising prices, the agency said to submit a report in London. 

In this paper, the IEA-founded after the 1973 crisis to ensure energy security for its members, all developed countries, including Spain, estimated that, under optimal conditions, Iraq represent 45% of the increase in world production for 2035 , ahead of the assembly of the Organization of Petroleum Exporting Countries (OPEC). 

In the coming decades, Iraq is now the third largest exporter in the world, will become the main supplier of Asia, especially China, where, within 25 years, could send some 2 million barrels a day. 

According to the chief economist of the IEA, Fatih Birol, is of global interest that the Arab country to reach its potential oil production because, otherwise, with rising prices and declining explorable areas, "the markets will be in turbulent areas "in the coming years. 

Iraq need to gradually increase the pace of investment in infrastructure, water supply and education, scarce $ 9.000 million per year to an estimated over the next 25 years of $ 530,000 million. 

Another challenge facing the government in Baghdad, Birol said, is to improve the national electricity supply remains very poor, allowing it to concentrate on developing the oil industry. 
In the best case, says the economist, the country could reach during the study period, to 2035, annual revenues to oil means $ 200,000 million, which more than offset the investment required. 
Birol noted that, with the revenue, Iraq could diversify its economy, which currently depends on the sale of oil in a proportion of 72% of gross domestic product (GDP). 

The IEA, which had the cooperation of the Iraqi authorities to his report, said the country also has a lot to do in the field of natural gas, but that energy source should be used internally first, to improve the energy supply, and then be exported. 
In his presentation in London, the Agency, based in Paris, admitted that in developing their study did not calculate the potential impact of the conflict in Syria or Iran tensions with developments in Iraq, considering that these events are unpredictable and affect the short term. 

If the predictions are true IEA and Iraq eventually becomes the second largest exporter, it would have serious geopolitical consequences, since it would be the second largest member of OPEC after Saudi Arabia and ahead of Iran and Venezuela, according to experts. 

Although war and internal conflict have damaged the oil industry in Iraq in recent years has experienced a recovery and Baghdad signed contracts with multinationals like Shell or BP to exploit its capacity. 

Crude oil exports from Iraq, which is estimated to have the fourth volume of reserves in the world, rose to 2.6 million barrels a day in September, the most in three decades. 
However, to meet expectations, it is crucial that the Iraqi government approves Hydrocarbon Law, which will regulate the sector that has been delayed due to disagreements with Kurdistan, said the IEA.

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