Iraq to Auction Vast Oilfields Despite Bombs
Source: Reuters, Ahmed Rasheed and Michael Christie (12/8/09)
". . .it's difficult to overstate the attractiveness of these fields for oil companies."
The risks, nearly seven years after U.S. forces toppled Saddam Hussein, were displayed on Tuesday when a series of car bombs killed 112 people in the capital, rattling the windows of the Oil Ministry where the December 11–12 auction will be held.
Ten largely untapped oilfields will be up for grabs, including "supergiant" fields like Majnoon with 12.6 billion barrels in estimated reserves, and West Qurna phase two, which has 12.9 billion barrels of oil.
They rank among the biggest, most accessible hydrocarbon deposits left on earth, and could add more than 2.6 million barrels per day to Iraq's oil output of 2.5 million bpd—helping to catapult the country into the top league of global oil producers.
"The vastness of its undeveloped reserves, its nine supergiants, among the lowest extraction costs in the world at $2 per barrel, and the fairly decent deal being offered by the government of Iraq—it's difficult to overstate the attractiveness of these fields for oil companies," said Evan Pressman, a partner at Iraq-focused research firm Ergo.
If they bear fruit, contracts that are emerging after Iraq's first post-invasion auction in June and those that will be struck this week, plus other deals being pursued separately, could take Iraqi oil output capacity up to levels that rival Russia's 10 million bpd and Saudi Arabia's 12.5 million bpd.
That would bring in the billions of dollars that Iraq needs to rebuild after decades of war, international sanctions imposed for the 1990 Kuwait occupation, and the neglect and sabotage that accompanied the years of warfare since the U.S. invasion.