Iraq and Qatar energy development

In the world, the energy resources are not equally distributed across the earth. For example, the Middle East owns of the world’s oil reserves. There are big differences between the countries in this area. So in this report, we will study two countries from Middle East: Qatar and Iraq. These two nations are directly opposed, first by Human Development report. In fact, Qatar Is considered as a very high human developed country, it is ranked at the 36 the place on a list of 186 countries.

Contrariwise, Iraq is considered as a medium human developed country, ranked 131 the. What can explain this difference? Qatar Is a recent country which has known a very quick expansion. Iraq Just got out from war and has to be rebuilt. First of all the situation of Qatar will be explained, then Iraq and finally the comparison between the countries. Qatar Qatar Is a small country located In the Middle East, on the Arabian Peninsula. As of 2012, the population is small (2. 051 million according to World Bank). The UN Human Development Report categorized it In the countries with a “Very high human development”.

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It’s not a coincidence since the discovery of the onshore Duggan oil lied In 1940, until that year, the mall activities were fishing and pearl hunting. Thanks to the discovery of these valuables resources, the whole country changed, not just the economy. For example, the lowest known life expectancy at birth was in 1960 (61. 25 years old) and the highest one is in 2012 (78. 45 years old). Of course, due to this discovery, Qatar Joined OPEC, the international organization whose members are the petroleum exporting countries. Talking about energy resources, let’s see the production and consumption of each energy available in this country.

The data used below are from BP Statistical Review of World Energy 2013. Production and consumption of oil (Thousand barrels daily) 2500 1 500 Production Consumption 1 OFF 2000 2002 2004 2006 2008 2010 2012 2014 The values on the Y-axis should be multiplied by 1000 (Thousand barrels) and of course the values on the X-axis represents the years. In 10 years, the production of oil significantly increased, reaching 1966 thousand barrels produced daily in 2012. By the way, the difference between the production and the consumption is higher in 2012 than in 2002: 719 thousand barrels (2002) against 1716 thousand barrels (2012).

This big difference can be explained by the fact that Qatar wants not to be pendent of its oil resources. So to avoid this situation, the government decided to diversify the economy. At the end of 2012, there were still 24 thousand million barrels of oil reserves. 2) Natural Gas Production and consumption of natural gas (Billion cubic meters) 180 160 140 120 20 Another resource of the country is natural gas. Qatar is a member of GEOFF (Gas Exporting Countries Forum). Like the oil production, natural gas production increased significantly reaching 145. 3 billion cubic meters in 2012 whereas in 2002 it was only 29. Billion cubic meters. The difference between both production and consumption s similar with the previous case: 18. 4 billion cubic meters in 2002 while in 2012 it was 130. 8 billion cubic meters. Furthermore, according to EIA (US. Energy Information Administration), Qatar is the “world’s fourth dry natural gas producer behind the USA, Russia and Iran, and the world’s leading liquefied natural gas exporter since 2006”. The comment made in the previous part also applied to this part: the difference between both curves above is the consequence of efforts made by the government to diversify the economy.

There was no information relating to the use of non-commercial energy sources. The neutron doesn’t consume nuclear energy or renewable energy. Tourism is also an important sector for their economy. Indeed, the changes made since 1940 makes Qatar an attractive country where it’s feels good to live. Iraq With the world’s fourth oil reserves and on the eleventh place concerning gas reserves, Iraq is nonetheless a modest oil exporter and totally absent in the gas market. Iraq’s energy sector is the key to the future prosperity of the country, and can be important to the stability and security of the global energy markets.

This weak valuation of the natural resources, the absence of data (for example there s no available data for oil consumption or gas consumption), the very low rate of exploitation of the reserves of oil (0,71 %) are the consequences of thirty years of (1980-1988), the two Gulfs wars and the UN sanctions (1990-2003) have had very negative results: damaged facilities, obsolete equipment; therefore, the complete process of extraction, transport and transformation equipment have to be rebuilt. As already said, Iraq exploited only 0,71% of his oil reserves.

In 1992, the proved reserves were 100 thousand million barrels, in 2012 it was 150 thousand million barrels, in twenty years the proved reserves increased by 50%. But the production didn’t increase proportionally to the proved reserves, it even decreased between 2002 and 2007 and then it stagnates. According to David Astrakhan, published in the Guardian, the peak oil is the cause of Iraq war, because the United States did know that there were a lot of oil reserves undiscovered, and they probably want to lay hands on it.

This argument can be illustrated by the fact that since the American invasion in 2003, the proved reserves went from 115 thousand million barrels to 150. Iraq is today the country with the most important reserves to develop and to operate in the world. This is also one of the most important oil’s potential reserves to be discovered country. Concerning gas, a major part of the reserves is coupled with the oil fields, only 20% of the gas reserves are independent. Overall exploitation and production are not dedicated to gas, same as for internal consumption which is non-existing.

In fact, most of the gas is flared when the oil is extracted. Iraq is the world’s sixth country in terms of potential gas resources to discover. Today, about twenty fields produce 3,1 million barrels daily, and are operated by companies which are dependent on the government willingness. But the situation will evolve. In July and December 2009, the government launched two tenders concerning the redevelopment of the oil’s fields. Awards concern services’ contracts where the companies get paid according to the barrel extraction, with a fixed price.

Although the remuneration is low and despite the violence’s problem, it didn’t discourage the firms, like Patrons (Malaysia), ZINC (China), Shell, Total, attracted by the massive unexploited reserves. The success of the tenders will allow the development of the country’s economy and the stakeholders. The Iraqi state, which up to now has enthroned the production, will, for 2020, delegate a big part of the production to foreign companies. The production levels announced for 2018 are more than 12 million barrels daily, therefore an increase by 387% of the production.

But to reach this goal, this requires considerable efforts in humans, technical and financial resources. Indeed, there is a huge need in equipment and workforce. The issue of water resources to assist oil production needs to be tackled; the switch from gas flared up to gas production has to be organized; and the complete logistic chain has o be reviewed because the current infrastructures are obsolete and undersized. The oil industry employs 6 000 people today, and will employ 40 000 people in 2015.

So many qualification programs are underway to train Iraqis to petroleum Jobs, a way to improve the population life and wealth and to increase the Iraq’s HID. Until now, the gas sector was let to count, the volume of the production is poorly known. Up to now, distribution. The Iraqi government aspire to strongly develop the gas sector in the country. In 2008, an agreement was concluded with Shell and Mediumistic in order to collect and valorize the gas. The production could quickly double. The gas production will be used, at first, for local applications, especially to produce electricity, and subsequently for exportation.

About the non-commercial energy, there is no information. So if we watch the way of life of an Iraqi, we note that they use fire to cook and to heat. They have electricity but only some hours per day, and they use donkeys or horses to move. Comparison Both countries have non-renewable energy resources such as oil and natural gas. About oil, it’s hard to compare them in terms of production and consumption because of missing data for Iraq about consumption. At the end of 2012, the proved oil reserves of Iraq are six times higher than in Qatar. About natural gas, the consumption data relating Iraq are also missing.

But this time, Qatar have more reserves than Iraq: 25. 1 trillion cubic meters against 3. 6 trillion cubic meters in 2012. Despite having these resources, both countries are not in the same situation. Indeed, in Qatar, in 2013, there was only 0. 3% of unemployment rate even if the population is small whereas in Iraq, there’s 11%. We can understand this difference by the fact that Iraq was involved in a war several years ago which later leads to a civil war. Another hinge is the tourism sector: Qatar is in a good situation but in Iraq, the sector is not going well because of the same reason said before.

Last but not least, the trade balance of both countries is a surprise. Indeed, in 2013, Iraq imported 66,61 billion dollars in food, medicine or manufactures and exported 91,99 billion dollars in crude oil, crude materials (excluding fuels), food and live animals. Qatar imported 39,58 billion dollars in machinery and transport equipment, food and chemicals and exported 12,7 billion dollars in LING, petroleum products, fertilizers and steel. It means Iraq is exporting more goods than it is importing which ay be positive for them. Qatar usually do the same thing but that year the reverse occurred.

Conclusion Qatar and Iraq are almost neighbors. However their situation is very different. The first reason to explain it is cache’s country history. Iraq has been ravaged and destroyed by 30 years of war and dictatorship while Qatar could be assimilate to a “start-up” because of its very quick growth in only 20 years, as can attest the impressive growth of its GAP. If we compare some of the HID parameter, we can see that the differences may be explained by the lifestyle of each population or the way of life of each population explain the difference. About the energy resources, Qatar and Iraq don’t use renewable energies.

Qatar should begin to start to use them if the country is willing to pursue its ambitions or projects. With regard to Iraq, the use of renewable energies is not planned which is strange for a sunny country with important electricity problems, which can be resolved by fields of solar panels.