(EnergyAsia, November 1 2010, Monday) — The International Monetary Fund (IMF) has sharply lowered Iraq’s 2011 oil production forecast to 2.2 million b/d from its previous expectation for 2.9 million b/d set in February.

In a review of its February US$3.7 billion standby loan to the war-battered country, the IMF also reduced its forecast for Iraq’s oil production for 2012 to 2.6 million b/d from 3.1 million b/d.

The downgrades follow a disappointing 2010 in which Iraq now expects to produce only 2.6 million b/d, well below its earlier forecast, substantially curbing export volumes, according to a joint report sent to the IMF by Finance Minister Baqir S. Jabr Al-Zubaydi and Central Bank governor Sinan Al-Shabibi.

“Oil export volumes averaged 1.88 million b/d in the first half of the year, falling short of our target of 2.1 million b/d for 2010,” it said, blaming adverse weather conditions for delaying tanker loadings at Iraq’s main export terminals.

The report also mentioned continuing “difficulties in securing an increase in oil exports from the northern oil fields.”

Nevertheless, with the higher-than-budgeted oil prices, government oil revenues were slightly higher in the first half of the year than projected.

As a result, the report said Iraq’s fiscal performance has been strong and its first-half budget deficit has remained below its ceiling.

In February, the IMF awarded Iraq a two-year loan of US$3.7 billion, of which 1.2 billion has already been disbursed.