Home

Oil exploration drilling began in Iraq in 1902, with the first oil field discovered in 1923. In 1927 the Iraq Petroleum Company discovered the Baba Dome the old fashioned way – with an uncontrolled gusher reaching 50 feet above the derrick that flowed uncontrollably at 95,000 bopd for nine days. This discovery turned out to be the southernmost culmination of the Kirkuk field.

As of 2008 Iraq had 20 known producing fields. Estimated reserves were ~112 billion barrels, placing the country 2nd behind Saudi Arabia. Iraqi peak production occurred in 1989 when it briefly exceeded 3.5 million barrels per day. However, current low production rates are the consequence of decades of underinvestment and violence subsequent to the Iran-Iraq and Gulf wars. (Update: in 2014 Iraqi production reached 3.5 million barrels per day.)

From a purely resource perspective, Iraq is the prize… (It’s almost as if a war was fought to for it…). Arguably the discovered and yet-to-find fields are of such significant scale that they could support global oil consumption for a couple of decades. The oil fields in southeastern Iraq are the largest concentration of super-giants found anywhere in the world, whilst the wider country has a multitude of fields that have never produced or fields that are in need of significant rehabilitation. Production increases of an order of magnitude, or more, are technically feasible. Also, Iraq remains one of the world’s most attractive exploration provinces.

Iraqi oil and gas fields

Iraqi oil and gas fields

In late 2009 Iraq held a series of auctions for production service contracts at the largest fields. The Iraqi oil minister, Hussain al-Shahristani, estimated that Iraq will be able to produce 6m barrels a day by 2017 based on the deals announced to December 2009.  However, the country hopes to raise production to 12 million barrels per day over this period based on all deals it was negotiating at end 2009. 12 million bopd is around 15% of 2008 oil demand, and almost as much as the #1 producer, Saudi Arabia, could provide. These production forecasts seem optimistic, but significant increases remain possible.

Iraq oil production history

Iraq oil production history

Interestingly the 2009 bids were much lower than originally estimated by the press. Subsequent to BP’s “low-ball” winning offer of ~US$2 bbl for the Rumaila oilfield in June 2009, predicated upon utilising CNPC as a low-cost JV partner (and labour pool), winning offers for the large fields have tended to be just over US$1 bbl. No bids were received for the East Baghdad field, the Eastern Fields, or Middle Furat, primarily because of security concerns and the fact that Middle Furat lacks infrastructure. US companies were conspicuous by their failure to win major concessions, with only Exxon winning a single licence.

Current Production (2009):

Iraq’s current production is dominated by two key fields:

The Kirkuk field, discovered in 1927, was the second largest producing field in the world in 1971. As of 2013 the field produces in the region of 250,000 barrels per day, down from nearly 1,000,000 barrels per day less than a decade ago.

Iraq’s North and South Rumaila fields, which stretch 117km from north to south, produce around 1.2 million barrels per day. The field was discovered in 1953.

Rumaila oilfield

Rumaila oilfield

Three other Iraqi fields are estimated to produce over 100,000 barrels per day:

  • Al-Zubayr field (240,000 barrels per day)
  • Bai Hassan field (200,000 barrels per day)
  • West Qurna (140,000 barrels per day)

If the production estimates are correct, Iraq’s other 11 producing fields currently average under 40,000 barrels per day per field. Iraq’s average well productivity averages 1,250 barrels a day per well.

This is going to change.

Southern Iraq

–       The 17bn barrel (recoverable) Rumaila field, discovered by BP in 1953, arguably caused the 1st Gulf War. It stretches for 117km from north to south and the initial dispute between Iraq and Kuwait was over extended reach drilling by the Kuwaitis into the field. Estimates of oil in place range up to 65bn barrels. Today it produces circa 1.2 million bopd, about half of Iraq’s production.

  • In June 2009 BP and China National Petroleum Corporation won an auctioned technical service contract, committing to raising production at the field to 2.85 million bopd for a fee of US$2bbl.

–       The 9-15 billion barrel (recoverable) West Qurna field, situated north of the Rumaila field, west of Basra, was originally considered to have the potential to produce 400,000 – 1 million barrels per day (Neftex figures).

  • In November 2009 Exxon & Shell won the right to develop West Qurna 1. They committed to increasing production to 2.1 million bpd according to Saba Abdul Kadhim of Iraq’s Petroleum Contract & Licencing Directorate.
  • In December 2009 Lukoil and Statoil won the right to develop West Qurna 2. The consortium committed to increasing production to 1.8 million bpd for a fee of US$1.15bbl.

–       The 11-20 billion barrel Majnoon field, discovered by Braspetro in 1975, had an expected initial output of 300,000 barrels per day with later development yielding possibly 600,000 barrels per day or more. 2008 production was estimated to be 46,000 bopd. Estimates of in-place volumes range up to 30 billion barrels.

  • In December 2009 the Iraqi government awared a service contract to Shell and Petronas, who committed to raise production to 1.8 million bopd for US$1.39 a barrel.

–       The 4.1 billion barrel Halfaya field, in Southern Iraq, closer to the border with Iran had production of just 3000 bopd in 2008.

  • In December 2009 CNPC, Total, & Petronas were awarded a service contract, committing to raise production to 535,000 bopd for a fee of US$1.40.

–       The Badra field, which Gazprom estimates at 2 billion barrels (recoverable) lies close to the Iranian border. The US government estimates the field’s reserves at 100 million barrels.

  • In December 2009 Gazprom, Kogas, Petronas, and TPAO won the right to produce oil from the field, committing to raising output to 170,000 bopd for a fee of US$5.50.

–       The Garraf field has estimated reserves of 863 million barrels.

  • In December 2009 Petronas and Japex won the right to produce oil from the field, committing to raising output to 230,000 bopd for a fee of US$1.49.

Two of the world’s largest fields did not appear on the auction lists:

–       The 6.6 billion barrel (recoverable) Nahr Umar field, discovered in 1949 by BP, was thought to have the potential of producing around 400,000 to 500,000 barrels per day of light crude (Neftex). It’s located north of Basra.

–       The 6 billion barrel (recoverable) Al Zubayr field currently has a production of 190,000-240,000 bopd.

Northern Iraq

–       The 10 billion barrel (recoverable) Kirkuk field, discovered in 1927, is in the north of the country. It has been in production since 1934, representing the 2nd largest producing field in 1971, and still produced almost a million bopd in 2008.

–       The Quiyarah field, discovered by an early incarnation of TPAO, is located close to Mosul in the province of Nineveh. It comprises heavy oil (17.1o API) at ~300m depth.

  • In December 2009 Sonangol won the right to produce oil, for a fee of US$5.00 bbl.

–       The Najmah field is located close to Quiyarah.

  • In December 2009 Sonangol won the right to produce oil from the field, committing to raising output to 110,000 bopd for a fee of US$6.00.

All of Iraq’s resource estimates are based on 1980s 2D seismic technology. Very few 3D surveys currently exist, none of which are extensive. The condition of Iraq’s existing fields is not clear (persistent rumours of poor reservoir maintenance and formation damage are associated with the Kirkuk field for example), although high bids by the IOCs in 2009 suggest that they believe much potential remains.

The exploration potential in Iraq is considered the best in the world, potentially with a huge remaining YTF. As of 2003 petroleum geologists had delineated and mapped over 526 prospects — drilling 131 prospects to discover 73 major fields (Geotimes, Oct 2003).

Neftex Iraqi Production Add Prediction (pre-auction)

Neftex Iraqi Production Add Prediction (pre-auction)

Approximate Licence Areas (Auction Round)

Approximate Licence Areas (Auction Round)

Iraqi Oilfield Locations

Iraqi Oilfield Locations

Unattributed Geotimes Prospect Map

Unattributed Geotimes Prospect Map

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s