[Graeme]

Oil Ministry -- Iraq has 150 billion barrels of reserves

Iraq's oil ministry is raising its estimate for the country's proven oil reserves to 150 billion barrels.

The revised figures represent a nearly 5 percent increase from the ministry's 2010 estimate of 143 billion barrels.

According to Oil Ministry spokesman Assem Jihad, the higher figures are the result of increased prospecting work in the country's oil sector over the past two years, adding that the revised estimates do not include the figures for Iraq's semi-autonomous Kurdish region.

Kurdish officials assert that the region under their political control contains 45 billion barrels, although the figure cannot be confirmed independently, the Arab News reported on Friday.

upi

[ROCKMAN]

Thanks Graeme. I checked the link and unfortunately as usual not much details. Even accepting an honest geological estimate of "proven reserves" I always feel the need to point out such numbers are somewhat meaningless if they don't include the price assumptions. Simply changing that one factor can increase or decrease the proven reserve stat 10% or more in a heartbeat. And I'm sure most here understand that proven reserves don't directly equate to production rate which is the critical aspect of PO. Given how completely dependent the Iraq/K govts are on oil exports no doubt they'll ramp up production as fast as possible. How fast...time will tell. OTOH as the country recovers it internal demand for energy will increase and reduce the amount of oil available for export. An important factor that many don't consider especially with regards to Saudi Arabia. Typically when optimistic projects are offered for future KSA production that focus is on just that...production volumes and not export volumes.

[ian807]

If all was perfect, it extends the world's supply by a tetch over 5 years. Not bad, although there's no word on price or net energy return, but I imagine the latter to be pretty good, as is much of the oil in that part of the world.

[Graeme]

Can Iraq meet its oil potential?

The debate over whether the Iraq War was really all about oil may never be fully resolved in some minds, but one thing is clear – either way, Iraq has yet to really cash in. The country’s GDP may have risen several fold in the decade since the war began, yet its income per capita lags not only oil rich neighbors such as Kuwait and Saudi Arabia, but also relative economic minnows including Botswana, Turkmenistan and Albania. This is despite the fact that it sits upon the world’s fourth largest oil reserves and could double its production in the next few years.

The question, then, is will Iraq be able to meet its oil potential?

Iraq currently pumps around 3 million barrels per day (bpd), but the International Energy Agency recently suggested that it could in fact generate more than any other supplier if the major causes of uncertainty – governance, deteriorating infrastructure and insufficient water supplies – are overcome.

To surpass Russia and even Saudi Arabia, though, would require an about $530 billion investment in the country’s infrastructure, according to the IEA. But even if it is able to muster this level of investment from oil revenues, Baghdad faces some unique and potentially crippling political challenges as well, including tensions between the central government and the Kurdistan Regional Government (KRG) in northern Iraq.

The effects of disputes over oil contracts and infrastructure holdups, stifling its development, were underscored earlier this year, when the Kurds halted exports following a dispute with Baghdad over the KRG’s right to sign contracts and sell petroleum – exports through the Kirkuk pipeline tumbled from 325,800 bpd in December to 264,500 the following month.

The dispute between the two sides essentially revolves around Kurds demanding the right to sign oil contracts independently, while Baghdad’s oil ministry resists over fears of Kurdish autonomy. About 10 percent of Iraq’s oil is produced from Kurdish areas, and a hypothetical Kurdistan would be rich in resources. But the central government, sensitive to the perceived danger of secession, believes that any oil contract signed with the KRG without its approval is illegal.

globalpublicsquare

[Graeme]

Peace, harmony and oil

Despite assertions to the contrary, Iraq’s Kurds are inching towards outright independence

Kurdish officials will not speak of independence yet. But several factors point towards a reckoning. One of these is the dismal state of the rest of Iraq. Battered by al-Qaeda bombings and worried by the likely fall of Syria’s pro-Shia government, a growing number of Iraqi Shias whisper that they should let the Kurds go, better to control what remains.

Meanwhile Nuri al-Maliki, Iraq’s increasingly dictatorial prime minister, has grown more confrontational towards the Kurds. In December he sent troops to Kirkuk, prompting the KRG to mobilise the peshmerga. In March, over Kurdish objections, the federal parliament passed a $118-billion budget that allotted just $650m to pay what the KRG claims is a $3.5 billion debt it owes foreign oil companies. The angry Kurds withdrew their federal ministers and MPs. They now have no official representation in Baghdad; Jalal Talabani, Iraq’s Kurdish president, whose easy-going charm has often soothed troubles, has been ill in Germany since December.

Whatever the current desires of politicians, oil finds may redraw Iraq’s borders. The Kurds say Iraq’s constitution frees autonomous regions to develop new fields, and have attracted big foreign firms with production-sharing deals that let them book reserves as assets. Baghdad says these are illegal; oil is the property of the people and all revenues must go to the central state. It is annoyed, too, that some of the 50-odd deals signed by the KRG fall in disputed territory.

So long as most of Iraq’s oil output came from the south, and so long as it controlled export pipelines, Baghdad held the upper hand. But Kurdistan turns out to have a lot of oil. Proven reserves are now put at 45 billion barrels, a third or less of Iraq’s total, but still nearly double America’s. Kurdish production capacity is rising fast. It should reach 1m barrels a day by 2015 and possibly 2m by 2020, says an executive at Genel, a British-Turkish firm that is Kurdistan’s biggest operator.

economist