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Iraq
Iraq to resume oil exploration after 20 years
2008-08-08
Iraq will resume searching for oil on Friday for the first time in two decades, the oil ministry said on Thursday, in the hope of finding vast reserves that lay undiscovered because of sanctions and war.

Iraq has 115 billion barrels of proven oil reserves, the third largest in the world, but the government believes the country's actual oil reserves may be three times as high.

Asim Jihad, spokesman for Oil Ministry, said it had trained three teams of geophysicists, geologists and engineers and would kick off exploration in the Gharraf field in Nassiriya in southern Iraq on Friday.

"Tomorrow, the equipment will be turned on to start the first oil exploration for 20 years, at a ceremony which will be attended by the oil minister and senior officials," Jihad said on Thursday.

Jihad said Iraq had only used about a fifth of the country's 500 possible oil-producing sites and they needed to explore more to try and confirm potential reserves. "These three teams are part of a group the oil ministry formed to renew exploration activity in order to change the unconfirmed reserves to confirmed ones," he said.

The first team will carry out seismic tests on the Gharraf field using up-to-date technology supplied by international companies, he said.

Deputy Prime Minister Barham Salih told Reuters in April he had seen estimates from "reputable companies" that put Iraq's oil reserves at some 350 billion barrels, a massive figure which would put the country ahead of Saudi Arabia.

Saudi Arabia is currently ranked first in the world with proven reserves of about 264 billion barrels, followed by Iran with some 137 billion and then Iraq on 115 billion. Iraq, whose primary source of revenue comes from oil, needs huge amounts of investment to boost oil output and rebuild the country after years of sanctions and war.

Violence in the country is now at its lowest since 2004. Iraqi Oil Minister Hussain al-Shahristani also said in June Baghdad hoped to let foreign firms bid on many non-producing oil fields and potential oil deposits from next year.

Posted by:Fred

#8  There are some wells here in Colorado that have been producing for 50 years. They only produce about 700bbls/year, and many of them only pump one day a week, but they continue to produce. While Iraq hasn't done much reservoir maintenance, I don't think too much damage has been done. There are several fields, especially in the Kurdistan area, that haven't even been tapped yet. I wouldn't be surprised if there were fields in the Diyala province that haven't been found, or between Baghdad and Basra. There may even be some in Anbar that haven't been located. I'd love to see the seismic data, but I wouldn't want to be a jug-monkey in Iraq in the summertime.
Posted by: Old Patriot   2008-08-08 15:28  

#7  At this point Iraq strikes me as a more stable and secure place to invest in oil projects than a lot of others - and with higher potential too. Look at the places we work - Angola (through all the civil war years), Nigeria (with weekly kidnappings), Congo, Indonesia, Libya, Venezuela, KSA, and even Europe and California! If the Iraqi government can get terms put together they'll have no trouble finding investors from the oil industry. We've been sending a few people in and bringing more out for training purposes for a while, in hopes of building connections and understanding. I am sure such programs will expand.
Posted by: Glenmore   2008-08-08 14:32  

#6  Oil wells normally have about a twenty year production lifespan, peaking in the first two years and then declining exponentially for the remainder of their life cycle. Since no replacement wells have been drilled for many years, it can probably be correctly assumed that the majority of their most productive wells are at, or near, the end of their production life span. Since Iraq has virtually no drilling and exploration infrastructure of its own, they have no choice but to contract out with international companies. IMO major oil production and drilling companies are probably very reluctant to even place bids, given the currant security situation. That would explain why it would be necessary for even the Kurdish Government to contract with each company on an individual basis rather than through an open bidding process. Drilling in Iraq will require the contracted companies to place hundreds of millions of dollars worth of investments, assets and personnel into an unstable area. Oil companies are no different than any other corporation. How many corporation executives do you know of simply sitting around salivating at the prospect of going to Bagdad? Probably none. Oil companies are no different. At the very earliest it will be several, if not many, years before any new wells can be put into production. In the mean time Iraqi oil production will continue to decline. And of course, what the msm decides to do with that fact will ultimately depend on who wins the next presidential election.
Posted by: junkirony   2008-08-08 12:40  

#5  And with over $79 billion in revenue already sitting in the bank, new oil should cover lots of outstanding debts and finance rebuilding, employing many refugees. They could outshine Dubai!
Posted by: Danielle   2008-08-08 10:37  

#4  I think in the last 20 years they have developed the tech to go much deeper, there may be massive fields that were overlooked simply because they were too deep. So, lets hope for everyone's sake that they are in Kurdistan.
Posted by: bigjim-ky   2008-08-08 09:46  

#3  S'long as they're not looking in Kuwait should be ok....
Posted by: Kelly   2008-08-08 09:45  

#2  Iraq may have 115 billion barrels of reserves, by probably not by SEC definitions of reserves. Thirty years of reservoir mismanagement have no doubt also taken a toll on what should have been reserves. Time will tell.

The may have another 200 billion barrels to be discovered - or not. Iraq is not a frontier province with lots of new places to look, and the biggest fields tend to be found early (e.g. KSA's Ghawar or Kuwait's Burgan). Time will tell this too.

Regardless, Iraq does have a lot of oil and a lot of opportunity to produce and find more. I would like to try, personally (but my wife would not be pleased).
Posted by: Glenmore   2008-08-08 09:15  

#1  Yay! Pelosi did the right thing and allowed a vote!

Oh, wait...
Posted by: Raj   2008-08-08 08:47  

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