Iraq’s Oil: Ready at Last

Saturday, June 06, 2009
Rumaila Oil Field, Iraq (photo: Al Jazeera)

Assuming the government of Prime Minister Nouri al-Malaki can maintain stability once the U.S. withdraws its forces next year, Iraq has ambitious plans for expanding oil and natural gas production, with the first big contracts to be due to be awarded this summer.

Currently, Iraq is only the world’s 13th largest oil producer, but that’s because much of the country’s petroleum reserves have yet to be tapped. According to the an analysis by the Energy Information Administration, Iraq sits atop the third largest proven oil fields after Saudi Arabia and Canada—and that’s just what geologists have found so far. In addition to the 115 billion barrels of discovered petroleum, Iraq may have another 45 to 100 billion barrels waiting to be uncovered in its western and southern deserts. Like the oil of Saudi Arabia, Iraq’s oil is close to the surface and can be extracted for about $2 a barrel.
The Iraqi government announced last year that it would award contracts to rehabilitate six major oil fields and two natural gas fields, including the Rumaila oil field, which is estimated to have reserves of 17 billion barrels. The winning contractors are supposed to be announced beginning June 28, but delays are possible. BP is favored to get Rumaila, Royal Dutch Shell the fields of Kirkuk and Missan, while Exxon is going after the Zubair field and Chevron will partner with Total on West Qurna-1. A second bidding round, this time for ten undeveloped oil fields and one natural gas field, was announced in December 2008.
The Iraqi government is planning to boost production up to 2.7 million barrels per day by 2010, and to 6 million by 2019. To compare, Saudi Arabia currently produces about 10 million barrels per day.
According to the International Monetary Fund, crude oil exports in 2008 already made up over 75% of the country’s GDP and 86% of government revenues.
Iraq also plans to expand its production of natural gas. In recent years it has produced about 100 billion cubic feet of natural gas a year. By 2017 it hopes to be turning out 2.5 trillion cubic feet annually. Iraq’s proven natural gas reserves are 112 trillion cubic feet, but the total amount of natural gas could be as high as 275-300 trillion cubic feet.
-Noel Brinkerhoff, David Wallechinsky
Country Analysis Briefs: Iraq (Energy Information Administration)
Iraq Hikes Signing Bonus as Bidding Nears End (by Samuel Cisnuk, IHS Global Insight)


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