*Foreign investment needed for oil well plans
*70 new oil wells to start pumping soon
*Iraq addressing oil infrastructure shortfalls
By Aref Mohammed
BASRA, April 17 (Reuters) - Iraq needs foreign companies to invest in drilling more oil wells as it does not have the capacity on its own to more than double national output of 2.3-2.4 million barrels per day of crude, the oil minister said.
Oil Minister Hussain al-Shahristani said Iraq has 70 new oil wells ready to start pumping crude in the next two months but lacks the infrastructure and resources to add much more than another 100 in its southern fields without foreign investment.
"Now, we have 70 new oil wells ready to pump and they will be linked to the pipelines in 1-2 months," Shahristani said in an interview on Thursday in the headquarters in Basra of the state-run Southern Oil Company.
Iraq holds the world's third largest proven oil reserves, but the fields are largely underexploited due to decades of war, international sanctions and underinvestment.
"We bought 24 new oil rigs, which will help us to add more wells to boost production. All these urgent activities will add from 200,000 to 300,000 barrels per day to our production capacity in two years."
Asked about previous comments from Iraqi oil officials that the Southern Oil Co planned to drill 400 new wells over the next couple of years, Shahristani said Iraq had an urgent need for at least that many to help it achieve its goal of producing 6 million bpd in five to six years.
"But with our own drilling potential we will not be able to cope with this figure," the minister said.
"How many new wells will be drilled over the next two years will depend on the willingness of foreign companies to come and work in Iraq. Using our own equipment, we will be able to drill more than 100 wells in the southern fields over the next two years. With the potential we have, that's the best we can do."
Iraq has opened the doors to foreign oil companies this year through two bidding rounds for oilfield servicing contracts, and has also invited specific foreign firms to compete for development contracts in others.
The sectarian slaughter unleashed by the 2003 U.S.-led invasion has begun to recede and overall violence is at its lowest levels in six years, but global oil majors say security remains a significant factor with regard to working in Iraq.
A centrepiece of plans to boost output is a joint venture with British firm Mesopotamia Petroleum Company, which is tasked with drilling 60 new oil wells per year, starting in the south.
The limitations imposed by Iraq's crumbling and ageing oil field infrastructure have become increasingly apparent in recent weeks to Iraqi officials and the Oil Ministry has embarked on what appears to be an aggressive plan to fix the problem.
It has issued a blitz of tenders recently for degassing and dehydration plants, valves, control systems, pumping software, pumps, storage tanks, and equipment for treating wet crude -- oil mixed with high levels of ground water.
One recent contract is a 63 million euro ($81 million) deal for water injection equipment in the West Qurna "super giant" oil field, awarded to GE Oil & Gas, an Italian subsidiary of GE , said deputy oil minister Ahmad al-Shamma. Shahristani said Iraq was keen to build new crude processing plants to cope with wet crude.
"We are trying to avoid this problem by starting to drill in fields which we studied previously and we are positive they will not pump wet crude," he said. (Additional reporting by Ahmed Rasheed in Baghdad; Writing by Michael Christie; Editing by Peter Blackburn)