December 4th, 2010

Iraq’s Strategy and Reserves Replacement

 

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Reserves replacement is to be taken seriously from a strategic planning point of view. As the country has embarked on a substantial program to build up Iraq’s crude oil and gas production capacity in cooperation with international oil companies, the fifteen oil fields to be developed and produced in accordance with the twelve contracts contain some 100 billion barrels of proven reserves based on the reserves revision released by the MOO. If those fields are depleted in accordance with contractual and development plans then it’s estimated that some 15 billion barrels of oil would be produced during the build up period of six to seven years to be followed by some 30 billion barrels during the plateau period of 7 years then 25 billion barrels in the remaining decline period until the end of contract. This means a cumulative of some 70 billion barrels is estimated to be depleted in the next 20 years. This amounts to about 50% of the country’s present proven reserves. From a purely planning point of view, a medium and low production scenario of 75% and 50% production performance would result in 52.5 and 37.5 billion barrels depletion respectively. Based on the above and in order to maintain the country’s leading position in proven reserves ownership and to sustain high production capacity for a much longer period beyond 2030, and the fact that Iraq is the least explored country among the big producers in the world, an exploration effort to convert probable reserves to proven reserves is going to be necessary in the coming years. Many exploration blocks with very high potential already exist in many regions in the country. Work may be conducted by our national Oil Exploration Company together with the Iraqi Drilling Co. It is also possible for foreign companies to work together with our national companies through different types of arrangements to be formulated by the MOO.

Excerpt from “Iraq’s Energy Strategy – A Mid and Long Term View” speech delivered at Iraq Petroleum 2010 conference London Nov.29, 2010

The Forum