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Iraq's oil can be extracted at a cost of two dollars a barrel
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Translated by IRAQdirectory.com - [4/22/2007]
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E.H.S consultative company said that oil could be extracted from Iraq's promising oil fields at a cost of less than two dollars a barrel and that the country's production could be doubled to four million barrels per day in five years, provided the improvement of the security situation.
The atlas prepared by the company on Iraq and expected to be issued on the 9th of next May estimated Iraqi oil reserves at 116 billion barrels, which falls in line with the estimates of the oil sector, and it says that there may be another hundred billion barrels under its western desert.
Head of E.H.S, Ron Mobed, said: “Iraq’s reserves represent a phenomenon; they can immediately be extracted from underground inexpensively after completing the infrastructure".
Iraq estimates that about $ 25 billion need to be spent on the collapsed infrastructure due to the sanctions which lasted for more than ten years in the era of Saddam Hussein and the continuing acts of violence which have bee going on for four years after the invasion led by the United States to the country.
This amount will be necessary to bring the level of production to four million barrels per day and beyond.
Moped said that these estimates may be conservative if the cost of capital will continue rising and that the security situation in Iraq must be improved so as to increase production capacity.
Major oil companies are trying to get a share of Iraq's reserves, which are the third largest reserves in the world, but are still waiting for the ratification of the Iraqi oil law which will be submitted to parliament next week, but the government of Kurdistan in the north, is objecting to some of its articles.
Moped said: "Iraq is moving very quickly towards encouraging foreign investment in comparison with the huge reserves in the region where free entry is almost non-existent to foreign companies”.
Iraq's oil production currently is about two million barrels per day, which is less than about three million barrels per day were produced at the end of Saddam's era and much less than 3.7 million barrels pumped in 1979 before the Iraq-Iran war. But Moped expressed confidence that the production will increase rapidly as soon as investments begin to flow. He continued: “doubling Iraq's production in five years does not seem farfetched. It is a matter of opening what has been closed and improve the rest".
E.H.S says that Iraq's production in the medium term may reach up to six million barrels a day.
Muhammad Zein, Regional Director of the company in the Middle East, said that sanctions and war have affected the main Iraqi oil fields, such as Kirkuk in the north and Rumaila in the south, and added: "There are some damages but they can be repaired".
Zein said that Kirkuk field is capable of producing over 600 thousand barrels per day, but currently it only pumps 350 thousand barrels per day, while Rumaila oilfields could produce one million barrels a day at least.
Most of Iraq's certain reserves exist in the Shiite south and Kurdish north, and this raised the fears of Sunnis in central and west of the country that agreements with the regional governments which are autonomous will deny them from the Iraqi oil wealth.
But Zein said that the center of the country also has rich fields such as the ones east of Baghdad.
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