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 IRAQ
Arabia/Persian Gulf
Iraq has large reserves onshore through the centre of
the country and along the Iranian border. However years of UN sanctions
and intermittent wars confuse the production picture and make it
difficult to accurately predict ultimate production capacity as output
has swung wildly over the years.
Prior to 2003, Iraq was an important swing influence in
the market for restricted oil even though the UN limited its exports.
Iraq is part of the folded northern Zagros and southern Arabian foredeep
provinces and fields are present in both regions.
The Zagros province includes the Kirkuk (Sirwan)
embayment, Lurestan, Dezful Embayment (Khuzestan), and Fars, the last
three being predominantly in Iran. Fields are generally large
anticlines.
 The fields in southern Iraq are similar to those in
Kuwait and Saudi Arabia. Reservoirs range in age from Miocene to
Triassic carbonates (Zagros) and sandstones There are 27 giant oil
fields. The largest fields are Rumaila in southern Iraq discovered in
1953 and Kirkuk, discovered in 1927, in northern Iraq.
In the last decade Iraq exported oil through three
UN-approved or tolerated routes: north by pipeline to Ceyhan in Turkey,
south by tanker through the Gulf port of Mina al-Bakr and west by truck
to Jordan. In 1991, at the end of the first Gulf War, exports were
prohibited and production was restricted to domestic needs.
In 1996 production was around 0.6 mm Bbls per day but in
late 1996 the UN introduced the oil-for-food programme. Export volumes
fluctuated after then, reaching 2.5 mm Bbls per day but dropping to
around 1.8 mm Bbls per day in 2002 as sales were depressed by the UN's
attempt to prevent retroactive pricing and surcharges by the Iraqis. In
addition illegal exports probably accounted for around 0.4 mm Bbls per
day.
Iraq had a refining capacity of more than 710,000 Bbls
per day and had a domestic consumption in 2002 of 330,000 Bbls per day.
Near term events in Iraq have had and continue to have an impact on
global oil supply. In late 2002 Iraq’s actual production capacity was
thought to be 3 mm Bbls per day although it could probably produce
almost 4 mm Bbls per day after 2 years of unrestricted output and full
investment, including work to restore shut-in wells and drill new ones,
installation of water management facilities in giant fields, restoration
of the export infrastructure and slightly longer term field development
projects such as Majnoon and the next phase of West Qurna.
However, Kirkuk and other major Iraqi oil fields have
sustained various kinds of damage to their reservoirs as a result of
years of sanctions and mismanagement. For example Kirkuk, Iraq’s largest
field with estimated reserves of 8.7 bn Bbls, is believed to include
1.48 bn Bbls of injected hydrocarbon waste. For years the country had
been starved of finance and technology, very few wells were drilled and
the few contracts being signed with Indian, Algerian, Chinese and
Russian companies only managed to maintain a low level of additional
activity.
After the war in 2003 an increase in oil exports to
generate revenue for re-construction was urgently required. But because
of pipeline sabotage Iraq is still unable to fully pump Kirkuk oil
through the northern pipeline to Ceyhan. The pipeline has been sabotaged
over 100 times. Conversely Iraq soon resumed export of oil from its
southern fields through the Persian Gulf. However larger output
increases will only happen after a stable government is installed.
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