[A-List] Iraq: progress, after all
michael011 at fastmail.fm
Thu Apr 19 07:34:23 MDT 2007
Iraq may hold twice as much oil
By Ed Crooks in London
Financial Times: April 19 2007
Iraq could hold almost twice as much oil in its reserves as had been
thought, according to the most comprehensive independent study of its
resources since the US-led invasion in 2003.
The potential presence of a further 100bn barrels in the western desert
highlights the opportunity for Iraq to be one of the worlds biggest oil
suppliers, and its attractions for international oil companies if the
conflict in the country can be resolved.
If confirmed, it would raise Iraq from the worlds third largest source
of oil reserves with 116bn barrels to second place, behind Saudi Arabia
and overtaking Iran.
The study from IHS, a consultancy, also estimates that Iraqs production
could be increased from its current rate of less than 2m barrels a day
to 4m b/d within five years, if international investment begins to flow.
That would put Iraq in the top five oil-producing countries in the
world, at current rates.
The IHS study is based on data collected in Iraq both before and after
the invasion, showing the oilfields reserves and production history.
Its estimate is based on analysis of geological surveys.
Production costs in Iraq are low, particularly compared to the more
complex offshore developments.
IHS estimates that they are less than $2 a barrel.
But the development of the industry depends on an improvement in the
security environment, which remains very difficult.
At least 170 people were killed on Wednesday in five co-ordinated car
bomb attacks in Shia districts of Baghdad, the deadliest attacks the
city has seen since US and Iraqi forces launched a joint security
crackdown in February. The attacks came hours after Nouri al-Maliki,
prime minister, claimed that Iraqi forces would be in a position to take
over primary responsibility for security in all of Iraqs 18 provinces
by the end of the year.
Ron Mobed of IHS said: Obviously the security situation is very bad,
but when you look at the sub-surface opportunity, there isnt anywhere
else like this. Geologically, its right up there, a gold star
Of Iraqs 78 oilfields identified as commercial by the government, only
27 are currently producing. A further 25 are not yet developed but close
to production, and 26 are not yet developed and far from production.
Iraqs government has estimated that it would need $20bn-$25bn of
investment from foreign companies to get production up to its full
Production methods have advanced greatly in the past two decades, and
methods such as horizontal drilling have yet to be deployed in Iraq. The
introduction of modern technology by foreign companies has the potential
to deliver steep increases in oil recovery.
Almost all the leading international oil companies and many smaller ones
have expressed an interest in working in Iraq.
So far the only new contracts for developments by foreign companies are
the five signed by the Kurdistan regional government in the relatively
peaceful north of Iraq.
Iraqs cabinet plans to present its proposed oil law to parliament next
week, following a meeting Wednesday of political leaders and experts in
Dubai. But many of the key details have yet to be resolved.
Oil production in parts of the western desert region that are attached
to Sunni Arab-majority provinces could help resolve some of the
differences between Iraqs sectarian political blocs.
The Sunni have until now been strongly hostile to the federalism
espoused by most Kurds and some Shia, arguing that it would deprive
their less well-resourced heartland in the centre of the country of
Additional reporting Steve Negus, Iraq correspondent
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