It spells a bright future for the Iraqi energy sector

In 2024, Iraq is ready to rebuild and revitalize its energy infrastructure. It also adopts a vision that balances the key role of hydrocarbons in the economy with the need to reduce emissions.

Central to this endeavor is careful consideration of what is best for the Iraqi people and their economy, and how best to chart a path to a more sustainable and prosperous future.

After decades of challenges, it is critical to ensure that every decision we make serves to uplift and empower the Iraqi people.

Progress of the energy transformation

The reconstruction of oil and gas assets has played a huge role in Iraq’s economic recovery, and the sector now represents over 90% of its GDP.

As the government’s main source of revenue, it is responsible for supporting the operation of all of Iraq’s critical infrastructure, from dams and power plants to schools and hospitals.

However, the Iraqi government also recognizes the need for decarbonization and has set a goal to dramatically reduce emissions by 2030.

Eliminating gas flaring is crucial to these ambitions because it can prevent large amounts of the main greenhouse gas methane from entering the atmosphere. The Iraqi government aims to reduce such emissions by 30% by 2030, and achieving and working towards this goal has produced tangible work.

This includes the Rumaila field project, which has set goals to bring greenhouse gas emissions from gas flaring to below 100 million standard cubic feet per day by 2025.

Instead of being flared, this gas can be collected and processed so that it can be sold or injected into oil reservoirs to increase the pressure during extraction.

The country is also making good progress in renewable energy, as highlighted last year when the EU and Iraq signed a joint declaration in which both sides will “deepen and intensify cooperation” on sustainable development and the transition to green energy.

Iraq has said it aims to generate about 25% of its energy from green sources by 2030 – a total of about 12 gigawatts – and has made $750 million in low-interest loans available in 2022 to finance solar initiatives.

Increasing the share of renewable energy will also be key to increasing green hydrogen and ammonia production, which Iraq aims to increase to 800 tons of green hydrogen per year by 2030.

The economic benefits of these projects are significant because they can help Iraq diversify its economy, create new revenue streams and efficiently use abundant renewable natural resources.

Empowering local talent

It is crucial that positive work on Iraq’s energy infrastructure is carried out in a way that provides local people with lasting skills, while making good use of expertise from other countries. This should be done in a way that promotes the transfer of knowledge and skills.

KBR has been supporting Iraq’s development since the early 1970s and can make a significant impact in developing a skilled local workforce.

Its team in the country is made up of 50% Iraqi nationals, who are imparted skills in areas such as emissions reduction, gas monetization and green ammonia production.

The Majnoon oil field project is one example of KBR’s activities in which the company has prioritized the use of local labor by awarding contracts to local construction companies and employing Iraqi nationals in senior management positions in the field and on construction, as well as in a number of engineering positions.

Maintaining proper balance

While Iraq is blessed with both hydrocarbons and renewable energy sources, its path to rebuilding its infrastructure and advancing its energy transition will require expertise and technology from beyond its borders.

The crucial role that oil and gas play in the country’s economy means that a carefully balanced path forward must be found, with eliminating gas flaring and reducing methane emissions as an essential first step.

Additionally, the country is implementing a promising approach to green hydrogen and ammonia production that could not only help further minimize greenhouse gas emissions but also reduce its economic dependence on hydrocarbons.

Collaboration with experienced international companies will be key to realizing Iraq’s ambitions, but this collaboration must respect the need to nurture local talent, expand Iraq’s skills base and enable it to become more independent as new projects are announced and implemented.