Iraq has the capability to lift its oil production capacity to 12 million barrels per day (bpd) though heavy investment is needed to do so, an Abu dhabi website reported Sunday.

The strife-torn Arab country and the world's second largest oil power after Saudi Arabia produced around 2.3 million bdp in March, of which nearly 1.9 million bpd were exported, Ali Hussein, an Iraqi senior adviser in the oil ministry, was quoted as saying.

Hussein, who made a lecture in Abu Dhabi on Saturday, said Iraqi oil export revenues were estimated at around 8 billion US dollars in 2003 and are expected to climb to 15 billion dollars in 2004 despite hostilities in many parts of the occupied country.

In the lecture on the future of Iraq's oil industry, Hussein estimated Iraq's proven oil reserves at 116 billion barrels. But the number could climb to more than 215 billion barrels if advanced technology is employed, he added.

He said Iraq should be allowed to produce as much oil as possible by the Organization of Petroleum Exporting Countries (OPEC) when its badly damaged hydrocarbon sector is being rehabilitated and stability is being restored.

He said, "There are two main reasons for this. First, Iraq's economy is in very bad shape and needs the highest earnings of its oil exports to rebuild its infrastructure.

"The second is Iraq will be in place to face growing global demand as the International Energy Agency expects oil demand to surge from around 79 million bpd currently to more than 120 million bpd in 2030."

He added OPEC should also take into consideration the fact that Iraq has the second largest oil deposits in the world and needs to make up for losses it has sustained in its oil industry and other sectors.

"Many OPEC members have benefited from the disruption in Iraq's oil supplies over the past years," he said.

He gave no figures on oil losses, but a former Iraqi oil official estimated it at nearly 222 billion dollars between August 1990 and last October.

By the end of 2003, the loss could have exceeded 230 billion dollars on the basis of Iraq's oil output and the level of exports before the 1990 Gulf crisis and the average crude prices in each month during that period, said Fadel Chalabi, Director of the London-based Centre for Global Energy Studies.

Hussein said funds, which are needed for Iraq's oil capacity expansion, could be raised through its crude export revenues, financial aid from Arab governments, the United States and other donor countries, as well as loans from banks, the International Monetary Fund and the World Bank.