From The Seattle PI

In the second quarter of the year, a U.S. military auditor recently reported, Iraq’s oil production averaged more than 2.4 million barrels a day, the highest level since the U.S. invaded Iraq in 2003, and a marked improvement on last year’s average of around 2 million barrels a day.

Rising output, along with the high (if now falling) price of oil, should pump up Iraq’s oil revenues to almost $80 billion this year. That, in turn, has allowed the country’s Parliament to boost this year’s budget from $48 billion to $70 billion in a supplementary spending bill approved earlier this month.

As security improves, the government has a lot more cash to spend than it did a year ago. Will it make the best of it?

For one thing, revenue from oil should go up more sharply still. Iraq produced 3 million b/d as recently as October 2001, despite the crippling U.N.-enforced sanctions at the time. Iraq’s oil minister, Hussein al-Shahristani, has spoken of raising output to 6 million b/d.

In theory, that is possible. Iraq’s proven reserves, of 115 billion barrels, are the world’s third-largest after Saudi Arabia and Iran. Yet Iraq ranks just 13th in terms of production, suggesting there is plenty of scope to pump more.

Russia, for example, produced almost 10 million b/d last year from reserves of 80 billion barrels. Only 27 of the 80 or so fields that have been discovered in Iraq have ever been tapped.

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