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

1 / 5
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)
2 / 5
The discussion took place on the second day of the SALT conference in Abu Dhabi. (AN Photo/Huda Bashatah)
3 / 5
The discussion took place on the second day of the SALT conference in Abu Dhabi. (AN Photo/Huda Bashatah)
4 / 5
The discussion took place on the second day of the SALT conference in Abu Dhabi. (AN Photo/Huda Bashatah)
5 / 5
The discussion took place on the second day of the SALT conference in Abu Dhabi. (AN Photo/Huda Bashatah)
Short Url
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.

UK resumes flights to Sharm El-Sheikh

Updated 18 February 2020

UK resumes flights to Sharm El-Sheikh

  • Experts say return of British tourists ‘very significant’

CAIRO: The Egyptian resort city of Sharm El-Sheikh on Sunday received the first British passenger flight since 2015 when a Russian airliner was bombed, killing all 224 passengers and crew on board.

The British Foreign Office announced last November it had lifted the suspension.  Flights will resume from Gatwick, Edinburgh and Birmingham airports, with five flights weekly from this month to May 2020.

A statement from the Egyptian Ministry of Civil Aviation said that Sharm El-Sheikh Airport received two TUI European-operated flights, the first British charter flights to the Egyptian Red Sea in five years. The first flight arrived from Gatwick with 184 passengers on board, while the second arrived from Manchester with 190 passengers.

Tourism experts predicted that the return of British flights would increase hotel occupancy in Sharm El-Sheikh since the resort destination had a large hotel room capacity and was ready to receive British tourists as well as tourists from around the world.

Before the travel ban, 906,000 British tourists spent 9.5 million nights in Egypt, with more than 600,000 British tourists spending their holiday in Sharm El-Sheikh. Experts expected that number to go up after the return of flights. They expect more than one million British tourists to visit Egypt in 2020.

"We are all thrilled with the return of British tourism to Egypt,” Hossam El-Shaer, head of the Tourism Companies Federation, said. “The total number of British tourists who arrived in Egypt in 2010 was more than one million. Hence, their return means they will return in the same numbers and they very much have an impact on tourism in Egypt.”

El-Shaer added that while British tourists stopped going to Sharm El-Sheikh they continued to visit another Egyptian resort city, Hurghada. 

“However, Sharm El-Sheikh is very significant to them since it is their prime destination. With the resumption of flights, around one million British tourists are expected to arrive in Sharm in El-Sheikh and other destinations in Egypt by 2021. This is a good percentage of the total number of tourists who come to Egypt, around 13 million annually.”

British tourism had previously focused on cultural tourism but it was following the global trend toward beach and leisure tourism. “Therefore, their return to Sharm El-Sheikh is very significant,” he said.

Tamer Makram, head of the South Sinai Investors Committee, said that Sharm El-Sheikh had been ready “for a long time” to receive British tourists, from resorts to infrastructure and security. He expressed hope that Russian tourists would also return soon.

He said the Ministry of Tourism and Antiquities had formed special committees and that the ministry would follow up on the committee’s observations.

“There are no longer any observations in terms of security, health and food safety as a result of the huge efforts exerted in this regard,” Makram added.

Egypt’s parliament hailed the return of British tourism. MP Yasser Omar, secretary of the Planning and Budgetary Committee, said the British flights showed that Britain had started to “correct misconceptions” about safety and security in Egypt which would encourage other countries to resume their flights to Sharm El-Sheikh. 

He added that Britain took the decision only after it was sure that high-level airport safety and security measures were taken in Egypt which conformed to international standards.

Omar said more tourists would come to Egypt, especially Russians as they represented the majority of tourists to the country.

MP Amin Massoud called for flights between Sharm El-Sheikh and Liverpool as a way of capitalizing on the popularity of footballer Mohamed Salah to promote Egyptian tourism, following the same approach with Egyptian players Mahmoud Trezeget and Ahmed El-Mohamady who play for Aston Villa.

Massoud said Britons made up the largest contingent of European tourists to Sharm El-Sheikh and Hurghada. Therefore, he added, the ministries of aviation and tourism should make use of Egyptian players who were popular in the UK to promote tourism in Egypt.