IRAQ - Background Of Reserve Estimates.

Iraq's oil and gas reserves data have been grossly conservative, with many single well discoveries passed over by IPC (BP, Shell, Total, Exxon, Mobil & Partex). Gas finds were neglected and associated gas was flared. Oil ministry officials claimed in the 1990s IPC had deliberately kept reserves figures low in order for successive governments in Baghdad not to press for higher oil production levels and not to attract competitive E&P offers from other foreign companies.

Oil reserves were proven at 25 bn barrels in 1960, and 27 bn in 1961 when Law No. 80 reduced the concession area of IPC and its affiliates (Mosul Petroleum Co. & Basra Petroleum Co.) to the limits of their producing oilfields. Published data reduced reserves figures from 26.5 bn barrels in 1962 to 23.5 bn in 1968, when the Ba'th Party came to power. But Ba'thist governments in the 1970s and in most of the 1980s also were conservative in their reserves estimates.

Published figures of proven oil reserves stood at 35.9 bn barrels in 1972, when IPC was nationalised, and dropped to a 29-32 bn range through the rest of the 1970s. In 1980 they were reported at 31 bn barrels, falling to 30 bn in 1981-82, and rising from 41 bn in 1983 to about 48 bn barrels in 1987.

In 1988 Baghdad announced a new estimate of 100 bn barrels, based on re-evaluation of data and new discoveries made by the oil ministry's upstream companies. By then the entire petroleum sector had been restructured, with INOC abolished and its various divisions coming under the direct control of the oil ministry. In March 1995, when it held an international petroleum conference in Baghdad, the oil ministry said Iraq's proven oil reserves stood at 112.5 bn barrels.

Geologists at the oil ministry then said foreign firms to be involved in E&P will have to establish a minimum discovery rate of 2 bn barrels/year of additional oil reserves in the post-embargo period. They said that will be necessary for the government to keep a balance between planned expansion of Iraq's oil output capacity to more than 6.35m b/d and the maintenance of a reserve level commensurate with such a production profile for the longer run. For this, they said, exploration should concentrate on defined leads within zones of high potential. There was also to be exploration in deeper areas.

Areas of prospectivity yet to be explored include the Palaeozoic and older Fms. Major finds have been made in the western desert. That region became attractive for exploration for the Palaeozoic play and for stratigraphic traps. The Permian Khuff reservoir is not properly studied in Iraq. A big Khuff gas field found in Iran is close to Iraq's border.

Natural gas has not received much attention in Iraq. Nearly 3.36 TCM (117.6 TCF) of gas reserves have been discovered so far, of which 10% are in gas caps. Most of the gas reserves found are in Tertiary reservoirs - in seven gas fields located in the north-east of the country. Some of the gas found in western Iraq lies in Ordovician Khabour sandstones. One of the fields found there, Akkas said to contain up to 7 TCF, lies in the Rutbah Platform above the Ordovician, where a well in 1993 tested light oil and condensate from sandstones with the Silurian Akkas Shale Fm and gas from the Upper Khabour. Two deeper gas shows were not tested due to high temperatures in the Ordovician.

Exploration in the past was largely in the hands of IPC and, after the 1972 nationalisation, in the hands of the oil ministry. A big number of prospects remain to be explored. Some of the found areas are to be tested. Also interesting to know is to what extent deep plays have been investigated within existing fields.