Iraq Output Hikes Could Halve Reserves in 20 Years - Official

LONDON (Dow Jones Newswires), Nov. 29, 2010

Proposed increases to Iraq's oil production capacity could lead to the depletion of 50% of its proven reserves in the next 20 years, a former oil minister said Monday.

Iraq's crude production capacity could increase to 8 million barrels a day within six-to-seven years, said Thamir Ghadban, who is currently chairman of the advisory commission in the office or Iraqi Prime Minister Nouri al-Maliki.

"I expect Iraq to be one of the world's leading crude oil producers," Thamer al-Ghadban, Prime Minister Nouri al-Maliki's top energy advisor, told an Iraqi petroleum gathering being held in London.

"If oil fields are developed according to our plans, 70 billion barrels is estimated to be depleted over the next 20 years--up to 50% of Iraq's proven reserves."

Foreign oil majors are ramping up drilling in Iraq in order to meet the government's ambitious goals, which were described last month as a potential "game changer" for world oil markets by the International Energy Agency.

Shell said last month it had boosted production at the Majnoon field to 70,000 barrels a day, up from 45,000 barrels. Iraqi officials now expect a consortium led by BP and China National Petroleum Corp. to meet a 10% production-increase target at the Rumaila field, lifting daily output by 100,000 barrels, to over 1.1 million.

Ghadban also said Iraq must double its refinery capacity within five years to meet domestic demand. Of the average 2.335 million barrels a day of production in 2010, some 1.875 million barrels a day have been exported, he said. Domestic electricity generation is meeting only 50% of demand, and still falls short even when imports from Turkey and Iran are taken into account.

Estimated crude oil production in the semi-autonomous Kurdistan Regional Government region area is 100,000 barrels a day, Ghadban said. The Baghdad government and the KRG have been at loggerheads over the best way to exploit the region's oil reserves.

Iraq's oil revenues, desperately needed to finance war-hit infrastructure and which make up more than 90% of the country's national budgets, reached some $230 billion between January 2006 and Nov. 1, 2010, he said.

Copyright (c) 2010 Dow Jones & Company, Inc.

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