Iraq could be holding almost twice as much oil reserves as had been estimated before the 2003 U.S.-led invasion, which, if true, could make the country the top producer in the world, according to a new study by energy analysts IHS.
The IHS survey, described as the “first and only detailed analysis” since the invasion, said that Iraq’s oil reserves are significantly untapped and that daily production could be doubled within five years. It also found that Iraq had known reserves of 116 billion barrels, and could be sitting on a further 100 billion barrels, almost twice as much as currently estimated.
If these reserves were exploited, Iraq could overtake Saudi Arabia as the world's top oil producer, the study said.
It also said the Iraq’s current oil output of two million barrels a day is lower than in early 2003, when three million barrels were being pumped.
However, the survey said that Iraq has the capacity to boost oil production to four million barrels by 2012 and to further increase that to six million within time.
"Iraq's reserves are clearly phenomenal," said Ron Mobed, president and chief operating officer of IHS, adding that they represented a "gold star opportunity".
Bit Mobed stressed that Iraq’s security situation must improve dramatically in order to secure foreign investment needed to improve the country's infrastructure. "Obviously the security situation is very bad. But once the infrastructure is in place, the oil will come out of the ground quite cheaply."
The IHS study also found that Iraq’s two main oilfields, at Kirkuk in the north, and Rumaila in the south, were operating below capacity. This was partly due to damage caused by the war and previous sanction regimes although Mobed said this was not "irreparable".
Earlier this year, the Iraqi government agreed a draft law for how its oil wealth would be shared among different ethnic groups, legislation seen as crucial to encouraging foreign investment. The proposed law is due to be considered by the Iraqi parliament next week, although the northern Kurdish region objects to some provisions. The other big reserve is in the Shia south.
Sunnis in central and western Iraq fear they won’t share in the country’s oil wealth. They new study, however, indicates that there are significant oil fields east of Baghdad.