Delegates at a London conference heard differing views on prospects for Iraq's oil industry ranging from the optimistic to the bleak.
The Apr. 10 conference heard rosy views focusing on the country's potential for oil reserves. The darker picture centered on Iraq's ability to revive its oil industry after war left the country in tatters.
Tariq Shafiq, a U.K. consultant with a record of work in Iraq's state oil company, said Iraq's present oil reserves are 122 billion bbl, with another 280360 million bbl in undiscovered potential reserves.
"There exist in Iraq some 530 structures that have been delineated by geological and geophysical means," Shafiq said. "To date, only 114 structures have been drilled, of which 73 were successful.,
Official reserves estimates for only a small number of these discoveries have been published. Shafiq placed total reserves for these fields at 144 billion bbl of oil, of which 22.3 billion bbl has been produced.
Iraq's oil production peaked at 3.5 million b/d in 1979.
Shafiq said, "Had Iraq's production growth reflected its oil reserves potential and been developed at the annual rate of increase of Saudi Arabia's production, it would have achieved 7.6 million b/d in 1980. Its current rate of production would have been about 6.5 million b/d."
A study of distribution of reserves discovered to date led Shafiq to estimate another 280-360 billion bbl of oil could be found in 143-183 new fields. These, he said, could be found among 286 geological structures believed to be prospective out of a total 416 still unexplored.
No prospects in Iraq's Western Desert region were included in Shafiq's estimates. Also, many large structures in the north were said to have been condemned as dry or gas finds: "No doubt some will have to be re-explored."
CONSERVATIVE VIEW
Charles Masters, research geologist with the U.S. Geological Survey, voiced a much more conservative view of Iraq's oil prospects.
Masters estimated Iraq's identified reserves at 91 billion bbl of oil., while ultimate oil resources will amount to 148 billion bbl.
This he compared to Saudi Arabian identified reserves of 259 billion bbl of oil and ultimate reserves of 374 billion bbl.
"Our estimate of 35 billion bbl undiscovered oil reserves for Iraq implies that major oil has been found in spite of the rather vast, only marginally explored area of western Iraq," Masters said.
"I suggest that 35 billion bbl is a reasonable assessment, and if anything too big, given the less than high quality of the parameters of petroleum occurrence we consider valid for Iraq."
Masters said there are no significant structures in western Iraq, and Iraqs potential would be large only if its exploration targets were big: "Our view is that only small targets are available."
CRUCIAL SUPPLY
Fadhil Chalabi, executive director of London's Centre for Global Energy Studies and Iraq's undersecretary for oil in 1973, said Iraqi oil could be crucial as worldwide demand rises by 13 million b/d by 2005.
But Chalabi warned these reserves could be lost to the oil industry if the country's current political chaos were allowed to run its full logical course.
"Iraq could add 4-5 million b/d to production capacity during this period," Chalabi said. "While Iraq is technically capable of doing this, the country's economic and political situation is so bad it is doubtful if it would be possible without international cooperation."
Chalabi said Iraq's maximum productive potential if United Nations sanctions were lifted is 2 million b/d. Spending of $5 billion and 2-3 years of work would be needed to restore production to the 3.3 million b/d level before the Persian Gulf war of 1990-91.
"The government of Iraq says only 14 months would be needed to restore capacity," Chalabi said. "The reality is nearer 3 years."
Two successive wars have reduced Iraq to a poor country Its oil infrastructure has been largely destroyed, and it has lost $85 billion cumulative oil revenues since the start of the U.N. oil embargo.
Iraq's international debt amounts to $60 billion. This is expected to rise to $110 billion to meet war reparation obligations and rebuild infrastructure.
"Iraq is in an appalling political vacuum," Chalabi said. "Government exists only to protect its own regime. The drama of Iraq is that a viable alternative to the vacuum does not exist.
"Unless the big powers agree to do something about Iraq, the country will remain in chaos. Turkey's invasion of northern Iraq is the first indication of how the country could be torn apart."
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