Who has the second largest amount of proven conventional oil reserves or easy to get to oil? Well if you asked me yesterday the answer officially was Iran but today that all may change. Iraq has announced that they will increase the amount of their proven oil reserves from mere 115 million barrels of oil to a whopping 143.1 billion barrels of oil putting them in second place in the world of cheap, easy to get to oil. Dow Jones reports that the figure, the first update since 2001, would mean Iraq has the world's second largest reserves according to statistics on the OPEC website. Iraq would take second place from Iran, which has 137.01 billion barrels of proven reserves, but would still be far behind Saudi Arabia, which has 264.59 billion barrels of proven oil reserves, according to OPEC figures.
"These aren't random figures, rather they were the results of deep surveys carried out by the ministry's oil reservoir company and international companies which signed contracts with Iraq," al-Shahristani said. "Most of these figures were the result of surveys conducted by these international companies, especially at oil fields such as West Qurna and Zubair."
Dow Jones say that Iraq has signed 12 deals with international oil companies to ramp up output capacity to about 12 million barrels a day from around 2.4 million barrels a day now. BP PLC (BP), Exxon Mobil Corp. (XOM), Royal Dutch Shell PLC (RDSA), Lukoil Holdings (LKOH.RS), Eni SpA (E), Total SA (TOT), Japan Petroleum Exploration Co. Ltd. (1662.TO) and China National Petroleum Corp., or CNPC, have signed on to develop Iraq's vast oil fields. Shahristani said the largest Iraqi oil field was West Qurna. With total proven oil reserves of 43 billion barrels, it could be the world's second largest. West Qurna is divided in two: Phase 1 and Phase 2. Exxon Mobil led a consortium and won a deal to develop Phase 1, while Lukoil led a consortium to develop Phase 2. Rumaila, which is being developed by BP and CNPC, is the second-largest Iraqi oil field, with total proven reserves of 17 billion barrels, the minister said. Majnoon, which Shell won the right to develop, comes third with proven reserves of 11 billion barrels of oil. These three are in southern Basra governorate. The untapped East Baghdad oil field, near the capital, has proven reserves of 8 billion barrels, while Kirkuk oil field in the north has 8.9 billion barrels, the minister said. Shahristani said 71% of Iraq's total oil reserves are located in the southern Iraqi governorates, particularly in Basra. Some 20% of the reserves are in northern governorate particularly in Kirkuk, while the remaining 9% are located in central Iraq. The minister said the new reserve figure doesn't include the semi-autonomous region of Kurdistan in northern Iraq. The region's authorities have estimated reserves in their Kurdistan region to be around 40 billion barrels. The ministry will update Iraqi oil reserves on yearly bases from now on, the minister said, adding he expects the reserves to increase." This is an amazing development. It has been said that one of the reasons that Saddam Hussein invaded Kuwait was because it had coveted its oil, If he only would have taken the time to look around. Oh well, another setback for peak oil theorists.
Oil’s assault on higher prices last week was just what the Federal Reserve wanted. The $80 a barrel plus oil prices is just what the doctor ordered to get your mind off deflation. The market will try to get a sense of what they feel will be the scope of the quantitative easing by looking at the economic data. Oil will continue to follow and not lead.
Phil Flynn is senior energy analyst for PFGBest Research and a Fox Business Network contributor. He can be reached at (800) 935-6487 or at firstname.lastname@example.org.