Iraq oil reserves rank third worldwide, overtake Iran

Iraq has leapfrogged Iran after a recalculation of its oil reserves according to a new report. The news will come as a boost to the war-battered country as it tries to rebuild its crude-dependent economy.

Iraq depends on crude oil exports for 95 percent of government revenue, and is trying to upgrade outdated infrastructure and spur economic growth after being crippled by decades of conflict and sanctions.

Oil Minister Hussein al-Shahristani confirmed at a news conference that "Iraq's oil reserves which are extractable are 143.1 billion barrels." If these figures are accurate it would represent a 24 percent increase over the existing figure, which was thought to be 115 billion barrels. Shahristani also confirmed that Iraq had a further 33.486 billion barrels that are non-extractable. The new estimates mean Iraq overtakes Iran into third place worldwide, but is still behind Saudi Arabia and Venezuela in oil reserves.

With the new estimates, Iraq now has 66 oilfields, including seven supergiant fields. Demographically the majority of these fields are located in the south (71 percent), with 20 percent in the Northern regions and nine percent in the centre.

Shahristani said known reserves at the West Qurna supergiant oilfield now totalled 43 billion barrels, making it the second biggest oilfield in the world.

He said details of the new figures would be passed on to the Organisation of Petroleum Exporting Countries later on Monday, but some analysts raised concerns over the newly reported levels.

OPEC unsure of total increase

"In the longer term, bigger reserves mean a bigger production quota since reserves are one of the factors used to calculate the (OPEC) members' relative production quotas," Ruba Husari, the founder and editor of iraqoilforum.com, told AFP.
"But the announcement is bound to raise questions within OPEC as to the methodology used to confirm the new reserves."

Husari said the announcement "came as a surprise because there has been little activity to justify it and whatever is currently being carried out at some of the fields in southern Iraq, such as 3-D seismic surveys, is still in the early stages."

Energy experts however have expected the figures to rise in Iraq, due mainly to the stagnant exploration during Saddam Hussein's leadership.

The increase in reserves puts pressure on Iraqi export infrastructure. Last month Iraq signed with Turkey to extend its use of the Ceyhan pipeline for a further 15 years, and also reached an agreement with Syria to build two pipelines connecting it to Mediterranean sea ports. The moves come in line with Iraqi estimates to export 10 million bpd within the next decade (current estimates are currently 2.4 million bpd), although commentators have suggested these increased exports are likely unachievable.

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