Dubai:  Iraq's signing of lucrative oil deals with international companies in the past few years has made it overconfident and for Baghdad to say it will "achieve in seven years what Saudi Arabia managed to achieve in 70 years" is not an accurate or realistic assumption, experts say.

"Actually, it is realistic if we have the [proper] infrastructure, which we don't have," Luay Al Khateeb, Executive Director at the London-based Iraqi Energy Institute, said.

"It would have been practical if we had the qualifications. But our [qualifications] are limited, and some of our [veteran experts] have reached the retirement age," Khateeb, head of the independent non-profit institute formed in 2008, added.

"It, also would have been practical if the demand and supply (in international markets) can take it," Khateeb told Gulf News on the sidelines of a meeting on Doing Business in Iraq held in Dubai recently.

Practical solutions

"There are conditions that determine what is realistic and what is not. There is nothing impossible, but there are conditions," he added.

Iraq is one of Opec's largest oil producing members. It is also among the world's top five for its proven oil reserves.

Saudi Arabia is the top exporter and has production of nearly eight million barrels per day (bpd), while Iraq's current production is around 2.4 million bpd. Iraq's oil production comes from "only 25 out of 85 known Iraqi fields," according to a study Khateeb presented at the meeting. And of that "83 per cent of historic production comes from Rumaila and Kirkuk" oil fields.

With more spending on upgrading Iraq's oil sector, and more foreign investment in that sector, some experts believe it would be realistic for Iraq to achieve the level of production of six to seven million bpd by 2020, if Opec continues to sustain its fair price oil policy.

Foreign investments in Iraq are not allowed in exploration and production. However, foreign companies are allowed to take part in service-related fields, Iraqi sources noted.

Divided returns

The Iraqi government proposed a few years ago a draft oil law that would open the door to foreign investments in the oil industry. It will also divide the oil returns equally among the country's 18 provinces.

However, the draft law sparked a great controversy. It was also opposed by many Iraqi parties, including the Kurds who describe the new draft as "unconstitutional", as it deprives the regions from controlling their oil fields and puts the final word in the hands of the Iraqi government in Baghdad. The Kurds have their own autonomous region in northern Iraq, which has many producing oil fields.

Scores of Iraqi experts, moreover, opposed the draft law, saying it had many loopholes that could benefit foreign investors at the expense of national interests. The draft law, announced in early 2007 has been shelved since then.

However, experts including Khateeb said there is a need to endorse the draft law, adding that it should be in harmony with the federal formula of the new Iraq as the constitution stipulates.

The role of the Iraqi National Oil Company should be redefined, and it should not "be treated as the spoiled child", Khateeb said.

Iraqi authorities should take all necessary steps to move away from the bureaucracy that prevailed in the past, he added.

"Bureaucracy" is an entrance to corruption," Adnan Blebil, Director General of the Iraqi Civil Authority said. It is a major threat to Iraq, he added. However, it can be dealt with a "master plan" for reconstruction that would specify the coming steps and it would also "fight corruption", Blebil added.