Oct. 4 (Bloomberg) -- Iraq raised its estimate of national crude oil reserves to 143.1 billion barrels, Oil Minister Hussain Al-Shahristani said today, overtaking Iran as home to the world’s fourth-largest petroleum deposits.
The 24 percent increase in estimated reserves lifts Iraq past neighboring Iran, which has 137.6 billion barrels, while leaving it behind Saudi Arabia, Canada and Venezuela. Iraq last estimated its oil reserves at 115 billion barrels, in 2001.
“This is great news for the Iraqi people, and we will relay it to the Organization of Petroleum Exporting countries,” Shahristani said at a news conference at the oil ministry in Baghdad. “The new figure for the reserves is not final. Iraq will carry out studies and reveal new numbers every year. We expect more increases.”
Iraq’s oil reserves previously ranked fifth in size, according to BP Plc’s Statistical Review of World Energy, which compiles official government figures. Canada’s reserves include vast deposits of oil sands, while Venezuela raised its estimates by around 70 percent in 2008, according to BP.
The revised Iraqi estimate does not include oil in the country’s semi-autonomous Kurdish region, as Kurdish authorities did not provide the ministry with details about reserves they control, Shahristani said.
‘Potential of Iraq’
The government may hope to use the augmented reserves figure “to show the potential of Iraq” to foreign investors, said Ahmed Jiyad, an Iraq specialist at the Centre for Global Energy Studies, a London-based consulting firm. It may also want to use the higher estimate to strengthen Iraq’s case for a large production quota within OPEC, he said in a telephone interview from Norway.
Iraq, a founding member of OPEC, does not currently have a quota for crude production. Falah al-Amri, the head of the country’s State Oil Marketing Company, suggested that future quota calculations might have been a factor in the revision.
“The new figure will help advance Iraq’s position within OPEC,” al-Amri told reporters in Baghdad.
Iraq depends on oil for the bulk of the foreign currency earnings it needs to rebuild the economy. The country currently produces about 2.4 million barrels of crude a day, according to Bloomberg estimates. The government wants to more than double output and hopes to pump 12 million barrels a day within as little as six years.
To achieve this goal, the country will need to boost production at oil fields and upgrade installations that have suffered from decades of conflict, sanctions and a lack of investment.
Rumaila and other fields in southern Iraq contain 71 percent of Iraq’s revised reserves, or an estimated 125.5 billion barrels, according to the oil ministry. Northern fields including those near the city of Kirkuk hold 20 percent of the nation’s crude, while central Iraq accounts for the remaining 9 percent.
Seven so-called “super-giant” fields contain 73 percent of Iraq’s total reserves, according to the ministry.
To raise output, the government awarded a dozen service contracts last year to international oil companies including Exxon Mobil Corp. and OAO Lukoil. The two licensing rounds were the first held since the U.S-led invasion that toppled the regime of Saddam Hussein in 2003.
Estimate ‘Not Random’
The new reserves estimate was “not random,” Shahristani said. “It came from in-depth studies by the ministry of oil and the international companies with which we have signed contracts in the first and second rounds.” He noted that officials paid particular attention to updating estimates for the West Qurna 1, West Qurna 2 and Al-Zubair fields, where Exxon Mobil, Lukoil and Eni SpA hold respective contracts.
The amount of oil contained in the 66 fields discovered so far in Iraq totals 505.4 billion barrels, but only 143.1 billion barrels of these reserves can be extracted, Shahristani said.
In a further step to develop Iraq’s energy resources, the government plans on Oct. 20 to hold its first auction of contracts to develop natural gas. Italy’s Eni and Mitsubishi Corp. of Japan are among 13 companies registered to bid to develop the Akkas, Mansouriya and Siba gas fields, Abdul Hadi al-Hassani, vice chairman of the oil and gas committee of the country’s parliament, said on Sept. 27.
The government aims also to modernize and enlarge export and storage facilities for crude. Officials want to build two offshore pipelines to increase export capacity in southern Iraq and plan new pipelines to link oil fields in the south with others in the north, said Thamir Ghadhban, chairman of the prime minister’s advisory committee, speaking at a conference in Istanbul on Sept. 27.
Iraq and Turkey agreed last month to a 15-year extension of their arrangement to export Iraqi crude by pipeline through the Turkish terminal of Ceyhan on the Mediterranean Sea.
To contact the reporter on this story: Nayla Razzouk in Amman at email@example.com