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Iraqi Reserves Claimed to Be Enormous
The Iraqi government claims that new seismic data from respected sources estimate proven reserves at 350 billion barrels, which would be the largest of any country on earth. If that claim proves close to being accurate, and if violent above ground conditions can be controlled, Iraq’s potential to produce far greater flows than its current 2.4 mb/d is potentially significant.
Against this new claim, some analysts believe that mismanagement of Iraqi fields under Saddam Hussein have caused such “watering” - that is, contamination of the oil - that Iraq will have trouble maintaining its current flows of crude into the future. Since the newly claimed reserves come primarily from fields that have not yet been fully explored let alone exploited, it is hard for me to credit the possible injury to oil fields under Saddam’s rule with the power to offset new production from fields not yet brought into service.
But even there are the sort of Iraqi reserves now claimed, the time needed to exploit them might be long. It could take five years - to 2013 - before large new quantities of Iraqi oil could be brought to market because the great global competition for experienced workers and for appropriate machinery is lengthening the time required to bring any new fields to markets.
A news report covering the new Iraqi claim is posted below.
May 20, 2008
Iraq could have largest oil reserves in the world
Sonia Verma in Sharm el-Sheikh
Iraq dramatically increased the official size of its oil reserves yesterday after new data suggested that they could exceed Saudi Arabia’s and be the largest in the world.
The Iraqi Deputy Prime Minister told The Times that new exploration showed that his country has the world’s largest proven oil reserves, with as much as 350 billion barrels. The figure is triple the country’s present proven reserves and exceeds that of Saudi Arabia’s estimated 264 billion barrels of oil. Barham Salih said that the new estimate had been based on recent geological surveys and seismic data compiled by “reputable, international oil companies . . . This is a serious figure from credible sources.”
The Iraqi Government has yet to approve a national oil law that would allow foreign companies to invest. Mr Salih said that the delay was damaging Iraq’s ability to profit from oil output, robbing the country of potentially huge revenues. With oil selling for more than $125 dollars a barrel and demand rising, Mr Salih is frustrated that Iraq still struggles over the establishment of a regulatory framework. “There is a real debate in the Government and among political leaders about the type of oil management structures we should have. I am for liberalising this sector and allowing the private sector to come in to develop these vast resources.”
BP, Exxon Mobil, Chevron, Royal Dutch Shell and Total have been queuing for rights to exploit Iraqi reserves. Mr Salih confirmed that Iraq was negotiating the outlines of two-year deals with some of the companies. He was optimistic that a draft law could be approved in the near future.
“We need to recognise after so many decades of mismanagement of the oil industry that we need to call a spade a spade,” he told a group of delegates at the World Economic Forum in Sharm el-Sheikh. “We can regulate it, but we need private investment to develop Iraq’s production capacities.” He said that Iraq was pumping 2.5 million barrels of oil a day at present, earning about $70 billion (£35.9 billion) in revenue this year.
The price of oil bounced back to record highs yesterday when Opec refused to increase supplies following Saudi Arabia’s promise to the US that it would provide an extra 300,000 barrels a day. In New York, the price of light, sweet crude for June delivery rose from $125.92 to US$126.35. In London, Brent crude for July delivery was up 82 cents at $125.81 per barrel.
Tags: peak oil energy investments
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4 responses so far ↓
1 K. Vora // May 20, 2008 at 10:03 pm
Cheney new this, and Saddam was pricing oil in euro, hence the Iraq war. The dumbs in administration had no idea about the tribal warfare leading to the current mess. Purpose of the war? Control oil price and maintain supremacy of dollar, and put pressure on Saudis. Appears all are lost causes.
2 paultaut // May 21, 2008 at 1:54 pm
Remember WTI @$130 before the end of May?
I don’t have a clue where it goes from here in the short term. After all, we are awash with oil. Just look at those Tankers off the coast of Iran, 20 million brls. of the Sour grade.
Meanwhile, the Iraqi’s are positioning themselves to have a bigger say in what Opec does, hence the increased guestimate.
Highly reliable sources, a couple of shepherds stick a staff into the ground and out comes bubbling crude. They go on to buy a Mansion in Beverly Hills.
3 sivere // May 22, 2008 at 12:41 pm
This is a volatile mix of reality (dimishing supplies, increasing demand for oil), politics (Iraq, Iran, US invasion), and a financial collapse to boot (not to mention potential for famine),
We need to develop our domestic sources asap. In addition we need to start developing alternative sources- coal, nuclear, solar, etc.
We need, in addition to the above energy scenarios, to http://www.TakeBackTheFed.com
If we do not get off our duffs, we will truly be in trouble. NOW IS THE TIME TO ACT.
http://www.siv0.com
4 paultaut // May 23, 2008 at 12:00 am
Since when do Politicians do anything that is in the general public’s good?
The crisis is not yet upon us but a sign of the times a coming is the US Army’s communique to congress asking for a declaration of National Security to supply them in the future.
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