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Posted by Lilly from D006043.N1.Vanderbilt.Edu ( on Tuesday, December 24, 2002 at 1:40PM :

In Reply to: check out this site posted by Lilly from D006043.N1.Vanderbilt.Edu ( on Tuesday, December 24, 2002 at 1:25PM :

Iraqi Oil and Gas Reserves, Oil Industry

Last Updated: 12-13-2002

Other Outlines and Fact Sheets

This outline currently contains some information on Iraq's oil and gas reserves and Iraq's oil industry.

NOTE: The outline below is presently being maintained by CCR. If you or your organization would like to sponsor this page, please contact us.

Table of Contents
1 Reserves

2 Current state of Iraq’s oil industry.

3 Table of Foreign Interests in Iraqi Oil Industry

4 Map of Iraqi Oil Fields

1 Reserves
a Oil.

i Proven reserves.

(A) 112 billion barrels of oil [US Department of Energy 10/02] or 15.1 billion tons. This represents 10.8% of total world proven reserves. [BPAmoco 2001]

(B) Iraq’s oil is high quality.

(C) Iraq’s oil production costs are among the lowest in the world. [US Department of Energy 10/02; Asian Times 11/1/2002; Alternet 10/16/02; Los Angeles Times 11/5/02; Guardian 11/22/02]

ii Prospects of additional reserves.

(A) The U.S. Department of Energy.

(1) The Department of Energy noted in its Iraq country brief that the “true resource potential may be far greater than this, however, as the country is relatively unexplored due to years of war and sanctions. Deep oil-bearing formations located mainly in the vast Western Desert region, for instance, could yield large additional oil resources (possibly another 100 billion barrels), but have not been explored. Iraq's oil production costs are amongst the lowest in the world, making it a highly attractive oil prospect.” [US Department of Energy 10/02]

(B) Taha Hmud Moussa, a former Iraqi deputy oil minister.

(1) In an interview with the Guardian before the current conflict, Taha Moussa said that Iraq’s oil “will exceed 300bn barrels when all Iraq's regions are explored.” If true, noted the Guardian “this means Iraq has a quarter of the world's oil.” [Guardian 11/22/02]

b Gas

i Proven reserves.

(A) 110 trillion cubic feet of natural gas. [US Department of Energy 10/02]

2 Current state of Iraq’s oil industry.
a Summary.

i UN sanctions on Iraq have resulted in the deterioration of the industry’s infrastructure and have damaged Iraq’s production capabilities, making it increasing difficult to maintain current levels of production. The Iraqi government has several active UN-approved agreements with non-US foreign companies to develop its fields. Iraq has also signed numerous other agreements which are not approved by the UN. The oil companies party to these agreements have decided not to begin work until either after the sanctions are lifted or until such contracts are approved. [US Department of Energy 10/02]

b Active and prospective contracts between Iraq and non-US foreign companies.

i Summary.

(A) The U.S. Department of Energy reported in its Iraq country brief (updated in October 2002), “In recent weeks and months, Iraq reportedly has signed a flurry of deals with companies from Italy (Eni), Spain (Repsol YPF), Russia (Tatneft), France (TotalFinaElf), China, India, Turkey, and others.” And according to a report in The Economist that was referred to in the Department of Energy brief, “Iraq has signed over 30 deals with various oil companies, offering generous rates of return (‘on the order of 20%’) as part of its ‘Development and Production Contract’ (DPC) model. Iraq introduced the DPC in 2000 to replace the previous ‘Production Sharing Contract’ (PSC) arrangement.” [US Department of Energy 10/02]

ii Russian companies.

(A) General.

(1) Some 300 Russian companies were doing business with Iraq in late 2002. [New York Times 10/17/02] According to The Washington Post, these entities included engineering firms, machinery manufacturers, and even subsidiaries that had been set up by politicians. [Washington Post 9/1/02]

(2) By late 2002, reported the New York Times, Russian companies had acquired the rights to sell roughly 40 percent of Iraq’s oil on world markets. [New York Times 10/17/02]

(B) Examples of such contracts.

(1) Lukoil contract to develop the West Ourna oil field. [Cancelled]

(a) In 1997, Russia’s biggest oil company, Lukoil, secured a 23-year $3.5 billion contract to develop and extract 667 million tons of oil per day from the West Qurna oil field in Iraq. The West Ourna field has an estimated 11-15 billion barrels in oil reserves. In the event that UN sanctions are lifted, Lukoil will have rights to 50% of the oil pumped, followed by the Russian and Iraq governments who will have a stake of 25% each. Russia fears that in the event that Saddam Hussein is removed from power, Lukoil’s oil agreements will be invalidated by the U.S. The estimated worth of the deal is $20 billion. Leonid Fedun, a vice president and part owner of Lukoil called the project “gigantic.” [New York Times 2/3/02; Washington Post 9/1/02; US Department of Energy 10/02] Iraq cancelled the contract in mid-December 2002. Baghdad had reportedly been angered by reports that Lukoil’s president, Vagit Alekperov, had sought assurance from the UN that the company’s contracts would be honored in the event that Saddam was ousted from power. [The Times of London 12/13/02]

(2) Zarubezhneft contract to develop Iraq’s Bin Umar field.

(a) In the event that UN sanctions are lifted, the Russian company, Zarubezhneft, will have the right to extract 3.3 billion barrels of oil from Iraq’s massive Bin Umar field. [Washington Post 9/1/02]

(3) Tafnet contract to drill 78 new wells in Iraq.

(a) According to the U.S. Department of Energy, Taftnet won a UN approved contract to drill 78 new wells in Iraq, making it the largest project to be undertaken by foreign company in Iraq since 1990. [US Department of Energy 10/02]

(4) Zaubezhneft contract to drill multiple wells at Kirkuk.

(a) Zaubezhneft announced in early December 1999 that “it was drilling multiple wells at Kirkuk, and that this did not violate U.N. sanctions.” [US Department of Energy 10/02]

(5) Zaubezhneft contract to drill 100 wells at North Rumaila field.

(a) Zarubezhneft has a contract to drill about 100 wells in the North Rumaila field. [US Department of Energy 10/02]

(6) Slavneft contract to develop Suba-Luhais oil field in southern Iraq.

(a) In October 2001, Slavneft, a joint Russian-Belarus oil company, signed a $52 million service contract with Iraq to develop the 2-billion-barrel, Suba-Luhais field in southern Iraq. The US Department of Energy noted, “Full development of Suba-Luhais could result in production of 100,000 bbl/d at a cost of $300 million over three years. As of March 2002, Slavneft reportedly was awaiting approval from the United Nations to drill 25 wells as Luhais.” [US Department of Energy 10/02]

iii Tunisia.

(A) In January 2002, the government of Tunisia signed an agreement with Iraq to develop the Al Kifl oilfield West of the southern province of Najaf. It would have a production capacity of 40,000 barrels per day. [Oil and Gas News 1/28/02; US Department of Energy 10/02]

iv French companies.

(A) TotalFinaElf contract to develop the Majnoon oil fields

(1) The U.S. Department of Energy explained in its Iraq country brief: “The largest of Iraq's oilfields slated for post-sanctions development is Majnoon, with reserves of 12-20 billion barrels of 28o-35o API oil, and located 30 miles north of Basra on the Iranian border. French company TotalFinaElf reportedly has signed a deal with Iraq on development rights for Majnoon. Majnoon was reportedly brought onstream (under a "national effort" program begun in 1999) in May 2002 at 50,000 bbl/d, with output possibly reaching 100,000 bbl/d by the end of 2002 (according to Oil Minister Rashid). Future development on Majnoon ultimately could lead to production of up to 600,000 bbl/d at an estimated (according to Deutsche Bank) cost of $4 billion.” [US Department of Energy 10/02]

(B) TotalFinaElf contract to develop the Nahr Umar oil fields.

(1) The U.S. Department of Energy explains in its Iraq country brief that was last updated in October 2002: “TotalFinaElf apparently has all but agreed with Iraq on development of the Nahr Umar field. Initial output from Nahr Umar is expected to be around 440,000 bbl/d of 42o API crude, but may reach 500,000 bbl/d with more extensive development. The 2.5-4.6 billion-barrel Halfaya project is the final large field development in southern Iraq. Several companies (BHP, CNPC, Agip) reportedly have shown interest in the field, which ultimately could yield 200,000-300,000 bbl/d in output at a possible cost of $2 billion.” [US Department of Energy 10/02]

v Other.

(A) Smaller fields with under 2 billion barrels in reserves.

(1) Nasiriya oil fields to be developed by Eni (Italy) and Repsol (Spain) [US Department of Energy 10/02]

(2) Tuba oil fields to be developed by (ONGC, Sonatrach, Pertamina) [US Department of Energy 10/02]

(3) Ratawi oil fields to be developed by (Shell, Petronas, CanOxy) [US Department of Energy 10/02]

(4) Gharaf oil fields to be developed by (Japex, TPAO) [US Department of Energy 10/02]

(5) Amara oil fields to be developed by (PetroVietnam) [US Department of Energy 10/02]

(6) Noor oil fields to be developed by Syria. [US Department of Energy 10/02]

c Observations.

i According to a Deutsche Bank estimate, contracts to develop roughly 50 billion of the 112.5 billion barrels of proven oil reserves have already been parceled out to mostly non-U.S. foreign companies, representing an investment potential of more than $20 billion. [US Department of Energy 10/02]

3 Table of Foreign Interests in Iraqi Oil Industry
Oil Field Proven (Probable Reserves) Company (country) Contract Description Cost
Majnoon 20-bil bbls TotalFinaElf (France) TotalFinaElf would have exclusive rights to this field $3-4 b
West Qurna 15-bil bbls Lukoil (Russia) [cancelled] Lukoil would have the right to extract 667 million metric tons of oil $3.7 b
Tatneft (Russia)
Rosneft (Russia)
Zarubezhneft (Russia) $380m
Basneft (Russia) $190m
East Baghdad 11-bil bbls +
Kirkuk 10-bil bbls + Tatneft (Russia) They secured agreements to drill 45 wells
Zaubezhneft (Russia)
Rumaila 10-bil bbls + Zarubezhneft (Russia) Zarubezhneft secured agreements to drill 100 wells.
CNPC (China) CNPC has a contract to develop a portion of the fields.
Mashinoimport (Russia) $160m
Bin Umar (Nahr Umar) 6-bil bbls + Zarubezhneft (Russia) Right to extract 3.3 billion barrels of oil $3.4 b
possibly TotalFinaElf (France)
Halfaya 5-bil bbls BHP (UK) All have shown interest in developing this field, no agreements. $2 b (both)
Agip (Italy)
Bai Hassan 2-bil bbls Tatneft (Russia)
Zaubezhneft (Russia)
Buzurgan 2-bil bbls
Khabbaz 2-bil bbls
Nasiriya 2-bil bbls Eni (Italy) $1.9 b (both)
Repsol (Spain)
Khormala 2-bil bbls $250 m
Ratawi 2-bill bbls Shell (US) $1.3 b (all three)
Petronas (Malaysia)
CanOxy (Canada)
Abu Ghirab 1.5-bil bbls
Tuba 1-bil bbls ONGC (India) $500 m (all three)
Sonatrach (Algeria)
Pertamina (Indonesia)
Gharaf 1-bil bbls Japex (Japan), TPAO (Turkey) $500 m
Suba-Luhais .5-bil bbls Slavneft (Russia) $2-300 m
Mashinoimport (Russia)
Sources: [Primary: U.S Department of Energy; Secondary: Washington Post 9/1/02; Guardian 11/3/02; Platts Global Energy; GeoDesign; Los Angeles Times 11/5/02; MSNBC 11/7/02; MSNBC 11/11/2002; Guardian 11/22/02]

-- Lilly
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