Industry, Energy And Power in Iraq

Industry

Main industries are oil refining, food processing, chemicals, textiles, leather goods, cement and other building materials, tobacco, paper, and sulfur extraction. In 1964, the government took over all establishments producing asbestos, cement, cigarettes, textiles, paper, tanned leather, and flour. Iraq has eight major oil refineries, at Baiji, Al Başrah, Daura, Khānaqin, Haditha, Mufthiah, Qaiyarah, Al Mawşil, and Kirkūk. The Iraq-Iran War, Persian Gulf War, and Iraq War of 2003 seriously affected Iraqi refining. Iraq had a total refinery capacity of 597,500 barrels per day in 2005. The bulk of Iraq's refinery capacity is concentrated in the Baiji complex.

Industrial establishments before the 2003 war included a sulfur plant at Kirkūk, a fertilizer plant at Al Başrah, an antibiotics factory at Sāmarrā, an agricultural implements factory at Iskandariyah, and an electrical equipment factory near Baghdād. In the 1970s, Iraq put strong emphasis on the development of heavy industry and diversification of its industry, a policy aimed at decreasing dependence on oil. During the 1980s, the industrial sector showed a steady increase, reflecting the importance given to military industries during the Iran–Iraq war. By early 1992 it was officially claimed that industrial output had been restored to 60% of pre-Persian Gulf War capacity. Beginning in 1996, Iraq was permitted to export limited amounts of oil in exchange for food, medicine, and some infrastructure spare parts (the UN "oil-for-food" program). By 1999, the UN Security Council allowed Iraq to export as much oil as required to meet humanitarian needs. The program was phased out in May 2003 following the defeat of the Saddam Hussein regime. In 2004, industry accounted for 66.6% of GDP.

Energy And Power

Iraq's petroleum reserves are among the largest in the world. As of 1 January 2005, Iraq's proven oil reserves were estimated by the Oil and Gas Journal at 115 billion barrels, of which, about 75 billion barrels had yet to be developed. However, the country's reserves may be significantly higher. Only about 10% of the country has been explored for oil and it is believed by some analysts that in Iraq's Western Desert region, deep oil-bearing formations may contain another 100 billion or more barrels of oil. Others are less optimistic, estimating that only another 45 billion barrels may lie undiscovered.

In spite of its huge oil reserves, Iraq's oil production has been deeply affected by the nation's wars, resulting in major drops in crude oil production. During Iraq's war with Iran, output dropped from 3,476,900 barrels per day in 1979 to 897,400 barrels daily in 1981, and from 2,897,000 barrels per day in 1989 to 305,000 barrels daily in 1991, following an embargo on Iraqi oil exports for Iraq's invasion of Kuwait in 1990. Iraq's oil production slowly increased to 600,000 barrels per day by 1996, and with the country's acceptance of United Nations Resolution 986, allowing limited oil exports for humanitarian reasons ("oil-for-food program"), production rose to about 2.58 million barrels per day in January 2003, just before the US-led invasion of Iraq in March of that year. As of May 2005, maximum sustainable oil production by Iraqi was estimated at 1.9 million barrels per day. Oil production in 2004 was estimated at two million barrels per day. Domestic demand for oil was estimated in 2004 at 550,000 barrels per day, and forecast to reach 650,000 barrels per day in 2005.

According to the Oil and Gas Journal, crude oil refining capacity was estimated as of 1 January 2005 at 597,500 barrels per day.

Iraq's natural gas reserves were estimated, as of 1 January 2005, at 110 trillion cu ft, with production and domestic consumption estimated at 53 billion cu ft in 2003.

Iraq's electric power sector has also been affected by the country's wars. During the 1990–91 Persian Gulf War, about 85–90% of the national power grid was destroyed or damaged. However, 75% of the national grid had been restarted by early 1992. Total electricity production in 2000 was 31,700 million kWh, of which 98% was from fossil fuels and 2% from hydropower. The country's generating capacity was about 9,500 MW in 2001. As of late May 2005, Iraq's available and operating generating capacity was placed at about 4,000 to 5,000 MW. Peak summer demand however, was forecast to be at 8,000 MW. In 2004, electric output came to 32.6 billion kWh, with demand at 33.7 billion kWh and imports at 1.1 billion kWh.