A new report from Bloomberg says Iraq will increase capacity from 2.8m to 3.25m bl/day next year.

Nov. 28 (Bloomberg) — Iraq, the fifth-largest oil producer in the Middle East, will spend more than $1 billion next year to increase oil production capacity by about 15 percent to 3.25 million barrels a day, an Iraqi official said.

“The budget is fixed for priority projects to build new export pipelines and complete modifications to our refineries,” Abdulilah al-Amir, a foreign relations adviser to Iraqi Oil Minister Thamir al-Ghadhban, said in a telephone interview.

Iraq, which holds oil reserves estimated to be the third largest in the Middle East at about 112.5 billion barrels by the Arab Oil & Gas Directory, can produce as many as 2.8 million barrels a day of oil at full capacity, al-Amir said from Baghdad.

Iraq’s plans to increase capacity to 3 million barrels a day this year were curtailed by persistent attacks by militants against foreign contractors and pipelines. The U.S.-government funded Restore Iraqi Oil program, called RIO, returned output to pre-war levels of more than 2 million barrels a day this year after last year’s invasion led to a production collapse.

Some of the world’s largest international oil companies such as Exxon Mobil Corp., the Royal Dutch/Shell Group and ChevronTexaco Corp., are intent on bidding to develop Iraq’s oil resources should the government decide to open up the industry to foreign investment following elections next year.

Good reading, for those so interested. I might also add that Iraq is believed to have the largest unproven reserves in the middle east at about 220 billon barrels.