Tuesday, October 5, 2010

Iraq raises estimate of its oil reserves


The oil ministry of Iraq has boosted its estimate of the country's oil reserves by almost a quarter, reinforcing the battered nation's enormous potential to help meet expanding global energy needs.

Hussain al Shahristani, the oil minister, said Iraq had 143.1 billion barrels of proved reserves, up from the previous estimate of 115 billion barrels.

He said the new figure reflected reserves that could be exploited with technology currently available in the country.

"Iraq will officially inform OPEC … in order for these new reserves to be recognised internationally," Dr al Shahristani said yesterday in Baghdad.

Further Iraqi reserves additions were likely as the ministry was pressing ahead with exploration initiatives launched two years ago, he added.

By comparison the UAE has 97.8 billion barrels of proved reserves. The re-assessment of Iraq's most important natural resource is psychologically important for the country, which faces vast logistic, security and financial challenges as it seeks to rebuild after years of conflict.

The government hopes to raise oil production capacity almost fivefold within six years.

If accepted by supranational agencies such as OPEC, the new data would re-establish Iraq as having the world's third-largest oil reserves. It lost that status last year after OPEC officially recognised more than 100 billion barrels of Venezuelan ultra-heavy crude as "proved reserves".

It could also establish Iraq as richer in oil than Iran, which is OPEC's second-biggest oil exporter.

That is vital for Iraq as a founding member of OPEC and a country likely to depend on oil exports for almost all government revenue for years to come.

Currently, Iraq is the only OPEC member without a production quota. But already it is looking towards the day when it will again be bound by an OPEC quota, the size of which would reflect the country's crude reserves and production capacity.

Iraq pumps about 2.4 million barrels per day (bpd) of crude but is seeking to raise that to as much as 12 million bpd.


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