418. IRAQ MOBILIZING
Four times current production would put about 8 or 9 million barrels a day of new oil exports on the market.Iraq aims to increase oil production by up to four times: ministerISTANBUL — Iraq aims to increase its oil production by up to four times with the development of 10 new fields to be auctioned later this year, Iraqi Oil Minister Hussein al-Shahristani said Tuesday.
The minister spoke after a meeting with oil companies in Istanbul to present the new fields and the terms for the tender, which will follow a first-round bidding in June that saw investors snub all but one of eight contracts on offer.
Iraq expects production from the new fields slated for auction "to be several million barrels per day", Shahristani said.
"So combining the fields of the first and second round, Iraq should increase its production to at least three to four times of its current production," he said.
Iraq, which has the world's third largest oil reserves, is yet to catch up with output levels prior to the US-led invasion in 2003, hit by deadly unrest and tensions between Baghdad and the oil-rich autonomous Kurdish region in the north.
Iraq currently produces around 2.4 million barrels per day, with oil accounting for some 85 percent of government revenues. It exports some two million barrels per day, most of it from the fields of the southern province of Basra. Link
posted by JD @ 5:36 PM
20 comments
20 Comments:
This article in Business Week points out that the oil fields offered in the first round of bidding several weeks ago alone would have given Iraq Saudi-esque levels of production. And that was only from 6 oil fields!
BP: Iraq Oil Deal is Start of Something Big
"One other aspect of the bid round was encouraging for the Iraqis. The top production targets bid by the international oil community on the six oil fields on offer add up to 8.2 million barrels per day. If achieved, that level of output would put Iraq in a rarefied league with Saudi Arabia as a major oil exporter."
As we all know by now, 5 of the 6 bids (Rumalia - the largest - being the exception) had their bids rejected by the Iraqis, but the Iraqis will be eager for the money (of course!) so it's only a matter of time before they get developed.
Looks like this could potentially put off the peak a few more years, or (supposing we're past peak already), form a nice uptick on the plateau.
Yes, and just think - that Iraqi oil has already cost Americans a trillion dollars and over 4000 lives. What a deal.
HDT
This is just silly.
There have been no new finds in Iraq for decades, the idea that BP somehow would have overlooked the equivalent of a new Saudi Arabia is preposterous. Official reserves are massively overstated, by Saddam personally no less. And existing reservoirs were damaged during the Iraq-Iran war due to overproduction.
This is actually old news, but related....
The Iraqi Deputy Prime Minister told The Times that new exploration showed that his country has the world’s largest proven oil reserves, with as much as 350 billion barrels. The figure is triple the country’s present proven reserves and exceeds that of Saudi Arabia’s estimated 264 billion barrels of oil. Barham Salih said that the new estimate had been based on recent geological surveys and seismic data compiled by “reputable, international oil companies . . . This is a serious figure from credible sources.”
@hurin,
There have actually been several recent sizable discoveries in Iraq of late, but the most important thing about Iraq is that Saddam neglected their oil industry for years. There are literally dozens of multi-billion barrel oil fields there that have never been touched, and many others that only saw small amounts of production. It's got nothing to do with large recent discoveries, it's that they've known for decades that Iraq had tons of oil that just sat there due to under-investment.
With all do respect to Hurin, he couldn't be more wrong. Saddam suppressed exploration and Iraq has, by and large, had no new geologists looking into reserves since the 70s. Here's a short section borrowed from Jim Kingsdale.
An Oil & Gas Journal (1/19/09) article, “Iraq’s Oil Prospects Prospects Face Political Impediments”, notes that Iraq’s proved reserves are 115 billion barrels, of 80 fields only 15 have been partially developed, the 7 largest fields contain 2/3rds of total reserves proven to date, and it’s potential reserves are 215 billion barrels, possible the largest of any country in the world. Finding cost is a fraction of a dollar per barrel and estimated finding and development costs are between $1.50 and $2.25 per barrel, among the lowest in the world.
Iraq and Iran are likely sitting on gigantic pools of oil. Exploration and recovery techniques have radically improved in the last 25 years.
Oil we have; thug states control it.
The reason to move the US to energy independence is not Peak Oil, but rather Thu State Oil, and to boost our domestic economy.
I agree with the sentiments of HDT. What an effing waste, $1 trillion in Iraq. We could have given every Iraqi citizen $50k for the same money. Bought every Iraqi family two Cadillacs.
Or, every family in four in America just incurred $12k in debt to pay for the war. Or they took $12k out of our pockets.
Hurin,
It is quite well known that a lot of Iraq has not even been explored. Especially using newer methods like magnetometers and seismological surveys. In fact, no exploration took place for around 20 years due to sanctions. So you seem to be the one being silly.
That being said, I wouldn't be surprised if most of Iraq's oil stays in Iraq because of the constant turmoil.
^
Anon, please sign your anonymous post with some name at the bottom for better communication.
Thank you!
JD
Of course it is plausible that they could produce volumes like this, considering the state of the industry in the country during the rule of saddam and now later during war and unrest.
Even so, i would very much like to know if these production estimates are based on new data, and if so, what data - and also I'd be curious to know e.g how organisations like the IEA and EIA have been viewing the future of Iraqi production in order to know if this actually is as big of a piece of news as it sounds like at face value.
Ah, here we have some commentary by the IEA :
http://www.iraqdirectory.com/DisplayNews.aspx?id=9744
So presumably it does not change a lot in their analysis.
Errata: It was not BT but the Turkish Petrolium Company that began exploration more than 80 years ago.
But these are all fantasies. Iraq has been explored left to right and up and down, all the big fields like Kirkuk and Rumailah were discovered many decades ago.
There are no large unexplored areas or huge undeveloped fields i Iraq. Like official reserves estimates that is just another fiction. Part of a verbel warfare between OPEC countries fighting over quotas.
But by all means, take a map of Iraq and point me to where these mythical new ghawar sized fields that will allow production to reach 9mbd are located.
Sure.
Middle East Economic Survey
VOL. XLVII
"Iraq’s estimated proved recoverable reserves were 115bn barrels at 1 January 2004 and its oil potential (undiscovered recoverable reserves) was estimated by CGES to be around 216bn barrels4..."
"In a paper presented by senior Iraqi officials at a seminar in Baghdad in 19955, the authors argued that 450,000 b/d can be developed from 11 appraised fields in the north, 3mn b/d can be developed from 11 appraised fields in the south, and 300,000 b/d can be developed from three appraised fields in the central area, making a total of 3.75mn b/d FROM THE 25 UNDEVELOPED FIELDS IN THE NORTH, SOUTH, AND CENTRE of Iraq. Add to that another 900,000 b/d, which can be developed from eight producing fields in the south, and the total would be 4.65mn b/d."
If you don't this citation, I'm sure I could find others.
Hurin is simply wrong. Iraq has barely been explored.
Contrast the hundreds of Iraqi exploratory wells so far, with over a million exploratory wells in North America.
The game is barely underway.
Hurin, you just don't get it.
It wouldn't even MATTER if Iraq had already been explored up the kazoo. The point is, most of these giant oil fields have barely been developed.
A must-read here:
Geotimes
^
"Petroleum geologists have delineated and mapped more than 526 prospects, drilling 131 prospects to discover 73 major fields. Some 239 undrilled prospects have a high degree of certainty. Thirty fields have been partially developed and 12 fields are actually onstream."
So, of 73 major discovered fields, only 30 have ever been developed to any extent, and only 12 are actually onstream. Then there's another 58 fields that have been drilled (no info on whether they're successes or not). But there's another 526 prospects - 239 of which they're pretty darn sure have oil in them!
The recent surveys that infer 350-Gb potential resource in Iraq are in all probability a measure inclusive of its 3P reserves. This metric would compare with the 900-Gb stat for Saudi Arabia.
Unfortunately, w/o authoritative confirmations, we are left with Hubbert's P/CP linearizations for validation. Although there has been some "dogleg" activity indicating that recent alternative conservative estimates have understated URR, they are far from encouraging.
Current linearization for KSA indicates a URR of only 192-Gb. Failing third party scrutiny of Iraq's status, linearizations will not give us a sense of its potential before 2014, imho.
This lack of excitement is reflected on the macro scale as well. My most current global linearization, with early YTD 2009 data, indicates that Regular Conventional Crude (RCC) has a URR of only 1,940-Gb.
RCC indeed peaked in May 2005 @ 68-mbd. It is a mere 61 today, reflecting a 2.6%/yr terminal production decline.
Colin Campbell and i are the only modelers tracking narrowly defined RCC. The differences between our premises will manifest in 2010. My PS-2200 model assumes that megaproject activity in Iraq, Saudi Arabia, Russia, etc will dampen the decline rate to 0.9% after 2009 (to 2025). Campbell's 1900-Gb Depletion Model projects the present decline rate will continue unabated 'til 2030.
JD what's up? Visiting this site from Google now states "This site may harm your computer". I was redirected to two pages before I could access this website. One of the pages warned me of Malware. Anyone else experiencing the same warnings?
Londondude
Hi Londondude, Everyone:
Sorry for the screw-up. Apparently I had a hot-linked image of a Cadillac on a page from 4 years ago, and that image was being hosted by a malware server. I've deleted the image, and I'm waiting for Google to reinstate me. Things should be back to normal in a "few hours or a day or so".
Apparently when this happens, you're supposed to contact your host and tell them to improve their security. Of course, Google is my host, so: improve your security you fuckwits!!
Hey, here is a fascinating webite: cngvehicle.net.
A used car dealer in Oklahoma, selling used cars converted to run on CNG, for less than $10k a pop.
Today. Now. No if, maybe when we do more research etc.
This sort of (yet again) crushes to whole doomer argument. Even if we "run out of oil," we have epic supplies of natural gas in North America, and more than 200,000 gasoline stations--sites which can easily be modifed to pump CNG.
Once again, I wonder if the shoe is actually on the other foot--how long 'till people figure out that CNG is cheaper than oil?
The Oil Era is ending, and with a whimper not a bang.
Not to disagree with the message about natural gas per se, but cngvehicle.net just seems to be a search engine thingy that provides links matching searches you make.
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