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The Warsaw Voice » National Voice » September 2, 2011
Special National Section: Iraq in Poland
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Will Iraq Become World’s No.1 Oil Producer?
September 2, 2011   
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Driven by what many geologists consider the world’s largest oil reserves, Iraq will probably be the world’s biggest crude oil producer within a decade.

The country currently ranks second to Saudi Arabia, with official proven oil reserves of 143 billion barrels. Iraq’s 115 billion barrels of proven oil reserves are found in 80 fields, of which only 17 have been significantly developed. In addition, Iraq has vast amounts of unproven reserves throughout the country, with experts estimating that to range between 45 and 215 Bbl. To date, only about 10 percent of the country has been surveyed for gas and oil deposits, creating a considerable opportunity for investors. With much of Iraq’s exploration still to come, Iraq could shortly climb to No. 1 in oil reserves.

In the last three years, Iraq announced four rounds of oil contracts signed with international oil companies in the world’s most transparent process ever. These contracts promise to take output from about 2.5 million barrels per day currently—less than Algeria—to over 12 million within a decade. Meanwhile, Iraq is likely to surpass Saudi Arabia’s 11 million barrels per day in a decade. The government of Iraq has announced ambitious plans to boost its oil production to 4.1 million bpd by 2012, and to 6 million bpd by 2018, and to 10 million bpd by 2020.

Due to lack of infrastructure, Iraq’s gas is highly underutilized while there remains significant debate over the future of its gas reserves. The desire of European markets and the Nabucco gas pipeline’s promoters to secure supply alternatives to Russian gas have made Iraq an attractive target, especially considering that Iraq’s oil and gas are easily extractable. The cost of bringing oil and gas production online in Iraq is among the lowest in the world. The country’s oil lies in enormous fields that can be tapped by relatively shallow wells. Iraqi oil rises rapidly to the surface because of high pressure on the oil reservoirs from water and associated natural gas deposits. More than a third of Iraq’s reserves lie just 600 meters below the earth’s surface, and some of Iraq’s fields are among the world’s largest. A barrel of Iraqi oil can be produced for less than $1.50. This is similar to production costs in Saudi Arabia and lower than virtually any other country.

Iraq’s gas production has increased since 2003, but its dry natural gas production of approximately 105 billion cubic feet (Bcf) in recent years is still well below the peak of 215 Bcf in 1989. It is estimated that 60 percent of associated natural gas is flared due to the lack of infrastructure. Iraq is developing the infrastructure for gas production to allow the country to become a leading natural gas exporter. In the long term, a more extensive gas infrastructure will be required in order for Iraq to tap into gas pipeline routes in Turkey that feed European markets. Iraq’s 10-year plan calls for a 150 percent increase in refining capacity by 2017. To achieve this increase, Iraq is seeking $15-$20 billion in investments for the construction of four new refineries and sizable expansions of the existing Daura and Basrah facilities.

Iraq seeks to sign of a memorandum of understanding between Iraq, Iran and Syria to establish a system to transfer gas from the Aslawea region in the south of Iran to Syria via a 2,000 km pipeline to supply Syria, Jordan, Lebanon and Turkey with gas and then to Europe.
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