The leaders of two of the world's biggest oil companies have pledged to rebuild Iraq's oil industry and boost production to about 10 million barrels of oil a day over the next decade – more than the current production of the world's largest producer, Saudi Arabia.
Tony Hayward, the chief executive of BP, said that his company hoped to increase production in the Iraqi field it has agreed to modernise from one million to three million barrels a day over the next 10 years. His counterpart at Royal Dutch Shell, Peter Voser, made a similar commitment on the two fields Shell is involved with.
Mr Hayward suggested that the return of Iraq to mass production for the international market after years of disruption due to war and international sanctions would be "an important contribution" to plugging the expected gap between global supply and demand in coming decades. Mr Hayward put the gap at 50 million barrels of oil a day by 2030 unless there was an increase in investment, more price stability and support from governments.
"We are cautiously optimistic about the potential that Iraq can play in providing a new source of supply to global oil markets," he said.
However, he also warned that progress could be interrupted: "The realities of the challenges of execution on the ground and the need to build capability on the ground mean things will happen a little slower than all of us are perhaps planning for today.
"The resources there are relatively easy to bring on stream and there is no reason to believe that Iraq can't be producing 10 million bpd by 2020 or so."
Mr Hayward added that the immediate outlook for the Western oil market is relatively subdued, though the long-term trend was for growth in demand and production from a current 85 million barrels a day to around 100 million a day by 2030: "None of us will sell more gasoline than in 2007" to developed markets, he said.
At the same session, Khalid al-Falih, the chief executive of Saudi Aramco, was upbeat: "I'm convinced we will be able to do a lot more than the 95 to 100 [million barrels a day of global oil production that is projected]... The concern of peak oil is behind us."
Commenting on unconventional natural gas – reserves that are difficult to extract, for example from shale – Mr Hayward said it could be "a complete game-changer in the US. It probably transforms the US energy outlook for the next 100 years. It's yet to be seen if it can be applied globally."