Iraq's Oil: The Greatest Prize Of All ?

I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil - Alan Greenspan (2007)

The Guardian had an interesting article recently on discussions about exploiting 40 billion barrels of Iraqi oil reserves.

The biggest ever sale of oil assets will take place today, when the Iraqi government puts 40bn barrels of recoverable reserves up for offer in London. BP, Shell and ExxonMobil are all expected to attend a meeting at the Park Lane Hotel in Mayfair with the Iraqi oil minister, Hussein al-Shahristani.

Access is being given to eight fields, representing about 40% of the Middle Eastern nation's reserves, at a time when the country remains under occupation by US and British forces. Two smaller agreements have already been signed with Shell and the China National Petroleum Corporation, but today's sale will ignite arguments over whether the overthrow of Saddam Hussein was a "war for oil" that is now to be consummated by western multinationals seizing control of strategic Iraqi reserves.

The subject of Iraqi oil is one which has fascinated me for a number of years, so in this post I'll outline why I believe that Iraq probably has the world's largest oil reserves - or, as Daniel Yergin once said of the middle east, it is "the greatest single prize in all history" (echoing a similar statement by George Kennan at the end of world war 2).

The Control Of Oil

What people need to hear, loud and clear, is that we're running out of energy in America - George W Bush (2001)

A few years ago I came across a book from the 1970's about the oil industry called "The Control Of Oil". The book was written by John M Blair, an antitrust economist who worked for the Federal Trade Commission and the Senate Subcommittee on Antitrust and Monopoly, paying particular attention to the oil industry. The book draws on his experience and the hearings conducted by Senator Frank Church's Subcommittee on Multinational Corporations into the industry in the wake of the oil price shocks of the early 1970s.

A reviewer at Amazon did a good job of concisely summarising the book, in particular noting that there was no supply shock in the years that the price shock occurred:

"The Control of Oil," By Dr. John M. Blair is a brilliant look at how the price of crude oil was determined by giant petroleum companies (the seven sisters) and a dozen members of the Organization of Petroleum Exporting Countries (OPEC). Blair traces the history of these controls and explains how they recklessly triggered the 1970's global energy crisis.

This 1976 publication is a classic. To this end, Blair spent thirty-two years in the federal government. He started in 1938 as an author of monographs for pre-World War II investigations. Early on, he made his name focusing on the sizable concentrations of economic power in the oil industry by the Rockefeller family and family foundation.

Afterwards he spent nearly a decade with the Federal Trade Commission as an Assistant Chief Economist and finally Blair spent fourteen years as Chief Economist of the Senate Subcommittee on Anti-trust and Monopoly. What makes this book truly special is the author's enormous access to critical government information.

Blair describes the oil industry's principal tax preferences, which worked to the advantage of the major companies and against smaller nonintegrated companies that could have favorably altered the availability and price of oil to consumers. The author also goes into great detail to reveal how the "Arab Embargo" that set the stage for the massive oil price explosion of October 1973 - January 1974 had little impact on supply and that in reality there was no crude oil shortfall. Ultimately, Blair emphasizes the need for developing alternate energy sources in the future.

The introductory section in the book includes an analysis of the lead up to the original Hubberts Peak (of US oil production) and presents a range of estimates for world ultimately recoverable oil reserves - all around the 2 trillion barrel mark still predicted by the ASPO. Unfortunately the author discounted the main oil peak (at that time predicted for around 2000) on the basis that, at the time, this was a full generation away, and that therefore the world will have moved onto a more sustainable and efficient energy model (he uses hydrogen as an example) and will have abandoned gas guzzling cars etc.

I had a good chuckle at that section.

The bulk of the book is divided into 3 parts - "The Control of Foreign Oil", "The Control of Domestic Oil" and "Erosion and Explosion".

The first part looks at the history of how the oil majors (known as "the seven sisters" at the time - Exxon, Mobil, SoCal, Texaco, Gulf, BP and Shell) manoeuvred to control the majority of the non-communist world's oil reserves, particularly in the middle east. In particular this involves examining the structure of the oil companies created in Iraq, Saudi Arabia, Kuwait and Iran, and the measures taken to ensure that the local governments followed the instructions of the oil companies, including the overthrow in the 1950's of Iran's democratically elected government of Mohammed Mossadeq when he tried to nationalise the oil industry.

Middle east oil was important to the oil majors in the days when there was far more supply available than required by the industrial economies of the time. The oil majors put in place a series of byzantine arrangements (such as the Achnacarry agreement) in order to restrict production and control the distribution ("marketing") of oil in order to maintain their desired profit margins and minimise the possibility of competition arising.

There is also a brief section on the attempt of the Italian state owned energy companies under Enrico Mattei to break the hold of the majors on oil refining and distribution in Italy. Mattei was successful for a while, but eventually he began expanding his enterprises outside and elsewhere in Europe and action was taken. Political pressure was applied to put a stop to this (with Exxon even donating money to the Italian Communist party - not a common move by American multinationals during the cold war - in order to get them to support moves against Mattei). Mattei eventually died in a mysterious plane crash, which put an end to the entire experiment.

The second section of the book looks at how oil production and distribution were controlled within the United States. The role of Rockefeller's "Standard Oil" monopoly is only briefly touched on, but the behaviour of the collection of oil companies that resulted from the breakup this organisation is examined at some length, along with the role of the Texas Railroad Commission in restricting production within the US (prorationing), and the import controls put in place by the government to restrict imports of foreign oil. The astounding range of tax breaks and transfers of money from the US Treasury to the oil companies is also examined at some length.

Part 3 discusses the events in the years leading up to the oil price shocks of 1973 and 1974. The oil price shocks were enabled by a range of factors - the arrival of Hubbert's peak for US oil production, and what Blair calls "The Evisceration of the Libyan Independents" (where Colonel Gaddafi's coup somehow resulted in the independent oil producers operating in Libya, who had made major dents in both the oil price and the market share of the majors, suddenly being effectively wiped out) and "The Crippling of the Private Branders" which describes how the majors throttled the supply of oil to the independent petrol retailing chains and refineries in the US.

By the time 1973 arrived, the majors were in a position where they once again controlled the oil coming into the US and the retailing of petrol and other refined oil products. Towards the end of the year, the Arab oil "embargo" was put in place and the price of oil sky-rocketed - as did the profit margins of the oil majors. In spite of the widely held belief that this event restricted the flow of crude, in actual fact the total oil production for the year grew at the customary 10% over the previous year (oil production growth was carefully managed for many years to achieve approximately 10% growth in supply each year - which made for a very smooth "Hubbert curve" up to the mid-1970's) - the "embargo" was preceded by a rapid rise in production for the preceding 6 months.

Some examination of the winers and losers in the whole episode is made - with the oil majors and the OPEC governments coming out ahead the most, the US in general doing fairly well thanks to petro-dollar recycling, but the developing world getting financially wiped out (which much of it still hasn't recovered from).

The History of Iraq's Oil

The Middle East with two thirds of the world's oil and the lowest cost, is still where the prize ultimately lies, even though companies are anxious for greeter access there, progress continues to be slow - Dick Cheney (1999)

The discovery of oil in 1908 at Masjid-i Suleiman in Iran led to interest in the possibility of oil being found in the region now known as Iraq. In 1913 the British Navy sent an expeditionary team to the Persian Gulf to investigate oil possibilities in the region. Around the same time, Britain signed a secret agreement with the Sheikh of Kuwait who promised exclusive oil rights to the British (unknown to his Ottoman rulers). Kuwait became a British protectorate in November 1914, and southern Iraq around Basra was occupied shortly afterwards, with the rest of the region being seized from the Ottoman Empire during the course of World War 1 (and for a while afterwards - causing some tension with both the Turks and the French) .

A country-wide insurrection began in 1920, and the British spent the next 10 years fighting a "war of pacification" against the insurgents (some things never change) and making heavy use of the fledgling RAF to do so. TE Lawrence's dispatches from Iraq during this period make interesting reading.

Winston Churchill is occasionally accused of using of gas against the Kurds in Iraq's north during this period, making him the role model for Saddam's later atrocities, though apparently he intended for tear gas rather than poison gas to be used, and it never actually eventuated (for that matter, Saddam also disputed that he was responsible for the Halabja massacre).

Britain granted independence to Iraq in 1932, leaving the country in the hands of a Sunni monarchy (though it maintained large permanent military bases in the country and maintained an indirect form of colonial control). During world war 2 the country was re-occupied as the British sought to protect the Iraqi oil fields free from German (and American) aspirations, with control being handed back to the monarchy after the war.

In 1958, the monarchy was overthrown by a nationalist military coup. After a period of instability, the Baath party seized power in 1968 and managed to consolidate control over the country, putting down a communist rebellion in the south and a Kurdish rebellion in the north. The 1972, Iraq nationalised its oil reserves and pushed the previous owners of the IPC out of the country.

Saddam Hussein formally assumed control in 1979, embarking on an 8 year war with Iran initially and shortly afterwards invading Kuwait (after accusing them of stealing Iraqi oil) and setting off the first Gulf War. A significant amount of Iraqi oil infrastructure was damaged during Saddam's wars, and the post-war sanctions restricted Iraqi oil production and exports. The second Gulf War and the insurgency that followed caused further damage.

Iraq currently produces around 2.2 million barrels of oil a day - 300,000 b/d less than its average before the US invasion in 2003. Iraq pumped as much as 3.7m b/d before the war with Iran in 1979.

The most interesting (and to this post, relevant) part of "The Control Of Oil" was on Iraq. Iraq was used as the "swing producer" in the middle east for a long period of time, with production throttled back and forth as demand required (Saudi Arabia and Iran were less amenable to this sort of manipulation).

The history of the Iraq Petroleum Company (IPC - a joint venture of BP, Shell and some of the american oil majors, along with "Mr Five per Cent", Calouste Gulbenkian) was examined in some detail, in particular the suppression of oil discoveries in Iraq in order to avoid the Iraqi government forcing the IPC to develop newly discovered oil fields. The chapter concerned can be found here:

Although its original concession of March 14, 1925 covered all of Iraq, the Iraq Petroleum Co., under the ownership of BP (23.75%), Shell (23.75%), CFP (23.75%), Exxon (11.85%), Mobil (11.85%), and Gulbenkian (5.0%), limited its production to fields constituting only one-half of 1 percent of the country’s total area. During the Great Depression, the world was awash with oil and greater output from Iraq would simply have driven the price down to even lower levels. Delaying tactics were employed not only in actual drilling and development, but also in conducting negotiations on such matters as pipeline rights-of-way. While such tactics ensured the limitation of supply, they were not without their dangers. If the Iraqi government learned that IPC was neither actively seeking new fields not exploiting proved and productive areas, it might withdraw or narrow IPC’s concession, or worse, award it to some independent willing and anxious to maximize production.

Suppression of Discoveries

From almost the beginning of its operations IPC not only suppressed production in Iraq (as well as in nearby lands) but went to considerable lengths to conceal that fact from the Iraqi government.

Of the many concession areas exclusively preempted by IPC, none was rapidly developed. IPC had held the area east of the Tigris River in the Mosul and Baghdad vilayets since1931, and by 1950 the only developed field was Kirkuk. Qatar is another illustration of “sitting on” a concession. Fearful that the area would fall to outside interests, Anglo-Iranian in 1932 obtained a two-year exclusive license for a geological examination of this peninsula. These exploration rights were expanded into a concession in 1935, and in 1936 were given to IPC under the terms of the Red Line Agreement. BP and Shell, however, were not anxious to develop more production in the Persian Gulf because of the effect this would have upon production in Iran. Although Mobil wanted more crude from the Persian Gulf, drilling did not start until three years and five months after the signing of the geological survey. A productive well was completed in 1939, and a few others were drilled after the war began; but in 1941, an official (Mr. Sellers) wrote: “….. as there is excess of petroleum products available from AIOC and Cal-Tex in Persian Gulf, it is obvious productive wells in Qatar will not be expedited at present time.” Commercial production in substantial quantities did not begin until 1950- eighteen years after the first exploration of the area. ...

World War II interrupted the operations of IPC in most of its concessions, and political disturbances handicapped its activities since that time. Yet even after allowing for these difficulties, in 1948 production in Iran was seven times larger than in Iraq, while in 1936 production in Iran was a little more than double that in Iraq. In Saudi Arabia commercial production did not begin until 1938, but by 1948 it was almost six times the production of Iraq.

The restrictive policies of the Iraq Petroleum Company during its early years have been summarized as follows:

Following the discovery of oil in Iraq in October, 1927, these three groups (BP, Shell, and Exxon-Mobil) employed a variety of methods to retard developments in Iraq and prolong the period before the entry of Iraq oil into world markets. Among the tactics used to retard the developments of Iraq oil were the requests for an extension of time in which to make the selection plots for IPC’s exclusive exploitation, the delays in constructing a pipeline, the practice of preempting concessions for the sole purpose of preventing them form falling into other hands, the deliberate reductions in drilling and development work, and the drilling of shallow holes without any intention of finding oil.

Restrictive policies were continued even after a pipeline was completed, for in 1935, IPC’s production was a shut back several hundred thousand tons. Moreover, for a time, a sales coordinating committee was established to work out a “common policy regarding the sale of Iraq oil.” Again in 1938 and 1939, the Big Three opposed any “enlargement of the pipeline and the corresponding increase in production” on the ground that additional production would upset the world oil market. Although the Big Three eventually conceded to the demands of the French (CFP) for some expansion, no action was taken until after World War II.

While the restriction of Iraqi production during the 1930’s had its roots in the generally depressed economic conditions of the time, the continued curtailment of Iraq’s output after World War II stemmed from different causes. With the development of Saudi Arabia and Kuwait, the US firms- which owned 100 percent of the former and 50 percent of the latter- gained large-scale sources of supply that were far more attractive to them than Iraq, where their ownership interest was only 23.75 percent. A later complication was the emergence of Libya as an important and largely uncontrollable source of Middle East countries. To the question of whether Libyan output could be accommodated within the limits of the overall growth rate Page answered, “Of course, with Iraq down.” Indeed, keeping Iraq “down” was the only means by which the high growth rates of iran and Saudi Arabia could be sustained in the face of Libya’s expansion without creating a price-reducing surplus.

That the IPC continued its restrictive practices into recent years I corroborated by an excerpt from what Senator Muskie referred to as “this intelligence report,” which he read into the record of the Senate Subcommittee on Multinational Corporations on March 28, 1974. According to the Senator, the report was “dated February 1967 and it has to do with this question of the potential in Iraq.”

In 1966 a study was made of the geological, geographical and other petroleum exploration data of the areas of Iraq relinquished by IPC, Iraq Petroleum Co. The purpose of the study was to help government let new concessions and obtain more advantageous terms from foreign oil firms. The study indicated that the untapped reservoirs of oil in Iraq appear to be fantastic.

There is every evidence that millions of barrels of oil will be found in the new concessions. Some of those new vast oil reservoirs had been discovered previously by IPC but they were not exploited because of the distance to available transportations, the heavy expense of building new pipelines and the fact that IPC has had a surplus of oil in its fields that are already served by existing pipelines.

The files yielded proof that IPC had drilled and found wildcat wells that would have produced 50,000 barrels of oil per day. The firm plugged these wells and did not classify them at all because the availability of such information would have made the companies’ bargaining positions with Iraq more troublesome. Many of these areas had been returned to the Government in settlement of the petroleum concession conflict between the Government and IPC.

So How Much Oil Does Iraq Have ?

The ... difference between North Korea and Iraq is that we had virtually no economic options with Iraq because the country floats on a sea of oil - Paul Wolfowitz (2003)

Estimates of Iraqi oil reserves vary wildly, with the figures below showing the extent of the variation.

Source Estimated Reserves
(billion barrels)
Colin Campbell (ASPO) 61
DOE / IEA 112
Oil and Gas Journal 115
BP Statistical Review 115
USGS 145
Petroleum Economist Magazine 200
Federation of American Scientists 215
Council on Foreign Relations / James A. Baker III Institute 300
Center for Global Energy Studies 300
Taha Hmud Moussa (Saddam's deputy oil minister) 300
Benito Livigni (former manager of ENI and Gulf Oil Company) 400

On a more anecdotal note, one poster at referenced a comment about Iraqi reserves in the documentary, "The Power Of Nightmares".

I think it was a segment of the BBC's "The Power of Nightmares"in which the owner of a small British petroleum exploration and development firm spoke about Iraq's true reserve totals. He did not give a total estimate - because it's not known - only that there was an awful lot of oil in Iraq. He said it in such a way as to be more than emphatic - talking about the amount of oil in Iraq in dreamy tones as if he were a conquistador talking about el Dorado.

He had completed making certain arrangements for the development of specific untapped fields with the Iraqi leadership when 911, and the subsequent invasion of Iraq spoiled his plans.

Gal Luft's survey for the Brooking Insitution ("How Much Oil Does Iraq Have?") made the following notes about the uncertainty surrounding estimates.

Given Iraq's poor record of reporting on other issues of international concern, there is every reason to suspect that Saddam Hussein's regime was less than candid in its reports on oil reserve estimates—especially during the past 12 years, when Iraq's oil fields were inaccessible to reputable Western companies.

Even before the 1990-91 Gulf War, it was difficult to assess what still lay beneath the Iraqi sands. Most of the geological data about Iraq's reserves was gathered before the nationalization of the Iraq Petroleum Company in 1972. From then on, data on Iraq's oil reserves was closely guarded by Saddam's regime, which limited the ability of the international community to conduct an external audit. For the most part, Iraq's oil data has been marred with inconsistencies, gross approximations, and, at times, bold exaggerations. In 1987, for example, despite the fact that it was in the midst of war with Iran and its oil industry was mostly static, Iraq claimed to have more than doubled its reported reserves from 47 bbl to 100 bbl. The increase was a lie: it was just creative bookkeeping designed to increase Baghdad's OPEC quota rather than the result of new oil discoveries. Over the last six years, Iraq has claimed that its reserves have remained constant, despite the fact that it produced close to a billion barrels per year through the oil-for-food program and its various smuggling operations via Syria, Jordan, Turkey, and the Persian Gulf.

As for undiscovered reserves, external auditing is even more difficult and Iraq's claims are even more dubious. Issam al-Chalabi, Iraq's oil minister from 1987 to 1990, admitted in the March 24, 2003 issue of the OGJ that Iraq's oil figures are "preliminary in nature since work was often interrupted by political problems, and the technology used is now outdated." Large parts of the country, especially in Iraq's Western Desert and its northwest, are still untapped and need to be explored. This is where the DOE and USGS really part company. According to the DOE-EIA's Iraq web page, deep oil-bearing formations located in the vast Western Desert region could possibly yield as much as 100 bbl. This again contrasts with the detailed data of the USGS, which suggests only a 50 percent possibility of 6.6 bbl in Iraq's Western Desert petroleum system. Even under its most optimistic scenario, the USGS predicts no more than 14 bbl coming from this area.

However, there are some facts that are undisputed. First, Iraq has considerable oil reserves and low production costs. Second, because of Iraq's isolation over the last decade—during which exploration technology has greatly improved—there has been almost no use of the most sophisticated exploration techniques such as seismological surveys, magnetometers, and sniffers in Iraq. Furthermore, most of the fields have not been explored down to the deepest layers of the ground, where plenty of oil can be found. Out of the 74 fields that have been discovered and evaluated, only 15 are actually operating. In addition, there are 526 prospective drilling sites in Iraq today, but just 125 of them have actually been drilled. Of those, 90 have shown potential as oil fields, but only 30 have been even partially developed. This means that once on the ground with sophisticated exploration tools, petrogeologists could establish in relatively short time a far more accurate picture of the scope of Iraq's reserve than the one we have today.

The most recent assessment I've seen comes from Barham Salih (Iraq's Deputy Prime Minister) earlier this year, where he announced the country has the world’s largest proven oil reserves, with "as much as 350 billion barrels".

As Luft noted, Iraq's oil production costs are among the lowest in the world (estimated to be around US$1.50 per barrel), but only about 2,000 oil wells have been drilled in Iraq - compared with about 1 million wells in Texas alone, which underscores just how undeveloped the country is as an oil province.

One of the few artifacts that surfaced from the secretive "Energy Task Force" conducted by Dick Cheney in 2001 was a map of Iraq's oil, including a number of blocks in the western desert denoted "Earmarked for production sharing" along with a list of "Foreign Suitors for Iraqi Oilfield Contracts".

In David Strahan's book "The Last Oil Shock", he notes "the CIA was also well aware of Iraq’s unique value, having secretly paid for new maps of its petroleum geology to be drawn as early as 1998".

The Iraq Oil Law

One of our greatest helpers has been the State Department - John D Rockefeller (1909)

One of the more interesting pieces of political maneuvering in occupied Iraq has been the attempt to pass a law governing how Iraq's oil reserves and oil revenues will be divided and what role international oil companies will play in the country.

There have been persistent claims the law is about to be passed for well over a year, but so far the Iraqi Parliament has managed to avoid doing any such thing.

The proposed law has been the subject of a lot of controversy during that time (with the Bush administration making it one of the primary "benchmarks" it wants the Iraqi government to meet), with this summary of "key facts" from Oil Change International being a good outline of the major complaints:

The proposed Iraq hydrocarbon law would take the majority of Iraq’s oil out of the exclusive hands of the Iraqi government and open it to international oil companies for a generation or more. The law is a dramatic break from the past. Foreign oil companies will have a stake in Iraq’s vast oil wealth for the first time since 1972, when Iraq nationalized the oil industry.

BearingPoint, a Virginia based contractor is being paid $240m for its work in Iraq, winning an initial contract from the US Agency for International Development (USAid) within weeks of the fall of Saddam Hussein in 2003. A BearingPoint employee, based in the US embassy in Baghdad, was hired to advise the Iraqi Ministry of Oil on drawing up a new hydrocarbon law. BearingPoint employees gave $117,000 to the 2000 and 2004 Bush election campaigns, more than any other Iraq contractor.

The process of drafting the oil law has been particularly troubling. The timeline of which entities have seen the draft when suggests that Iraqi interests are not being considered first and foremost:

* Draft shown to US government and major oil companies – July 06
* Draft shown to the International Monetary Fund September 06
* Draft shown to Iraqi Parliament: February 07

The Iraq National Oil Company would have exclusive control of just 17 of Iraq’s 80 known oil fields, leaving two-thirds of known — and all of its as yet undiscovered — reserves open to foreign control.

The law sets no minimum standard for the extent to which foreign companies would not have to invest their earnings in the Iraqi economy, partner with Iraqi companies, hire Iraqi workers or share new technologies.

The international oil companies could also be offered some of the most corporate-friendly contracts in the world, including what are called production sharing agreements. These agreements are the oil industry’s preferred model, but are roundly rejected by all the top oil producing countries in the Middle East because they grant long-term contracts (20 to 30 years in the case of Iraq’s draft law) and greater control, ownership and profits to the companies than other models. In fact, they are used for only approximately 12 percent of the world’s oil.

Iraq’s neighbors Iran, Kuwait and Saudi Arabia maintain nationalized oil systems and have outlawed foreign control over oil development. They all hire international oil companies as contractors to provide specific services as needed, for a limited duration, and without giving the foreign company any direct interest in the oil produced

Iraqis may very well choose to use the expertise and experience of international oil companies. They are most likely to do so in a manner that best serves their own needs if they are freed from the tremendous external pressure being exercised by the Bush administration, the oil corporations — and the presence of 140,000 members of the American military.

The leadership of Iraq’s five trade union federations released a statement opposing the law and rejecting ‘’the handing of control over oil to foreign companies, which would undermine the sovereignty of the state and the dignity of the Iraqi people.’’ They ask for more time, less pressure and a chance at the democracy they have been promised.

When I first read about the proposed law, the point that instantly caught my eye was the handing over of all "undiscovered" oil to possible foreign exploitation - which makes a lot of sense if you consider Professor Blair's stories about suppressed oil discoveries back in the old days (along with large swathes of the country remaining unexplored).

Of course, the Iraqi government may have thwarted this particular tactic with it's announcement this year upping reserves to 350 billion barrels, thus restricting the "undiscovered" category to any amount found beyond this number.

The Iraqi Deputy Prime Minister told The Times that new exploration showed that his country has the world’s largest proven oil reserves, with as much as 350 billion barrels. The figure is triple the country’s present proven reserves and exceeds that of Saudi Arabia’s estimated 264 billion barrels of oil. Barham Salih said that the new estimate had been based on recent geological surveys and seismic data compiled by “reputable, international oil companies . . . This is a serious figure from credible sources.”

In the meantime the Iraqis are perhaps hoping they can dawdle over passing any law for as long as it takes for US troops to leave the country (a reversal of the "iron butt strategy") - something the Iraqis are asking to occur by 2011 (prompting some fairly blunt threats from the US military).

Various tactics have been tried by the oil companies as well, ranging from attempts to negotiate contracts directly with the Kurdish regional government in the north, to a range of no bid oil contracts (later cancelled) to the recent sell-off discussions in London that I started the post with (the outcome of which doesn't seem to have been reported anywhere that I can find, other than one Iraqi exile claiming the Guardian's reporter had misinterpreted what was going on).

Of course it’s about oil, we can’t really deny that - General John Abizaid (2007)


As we frequently find elsewhere, there is very little in the way of transparent data regarding Iraq's oil reserves, so many interpretations of what is going on seem to be basically political in nature.

However, given the history of Iraq's oil industry and its largely undeveloped state (even when considering well known reserves), I think some of the higher estimates for Iraq's oil reserves are likely true. The oil that could be extracted will have much lower extraction costs, assuming the security situation can be fixed, than anywhere else - its entirely possible that if Iraq's oil industry had developed unhindered in the past, high cost oil developments like Canadian tar sands projects might still be in the planning stages, and only justifiable on energy security grounds.

The Iraq Oil Ministry is continuing trying to get the oil law passed, and predicting potential production in the 10 million barrel per day range (even the limited sell off supposedly under consideration could result in an increase in production to 4.5 million barrels per day, according to the Wall Street Journal).

It is numbers like these that make me think the global decline rates we will see post peak won't be as steep as some people fear in the medium term - however I hope that the Iraqis manage to free themselves from outside influences and get to determine the fate of their own property, rather than an occupying army ensuring that foreign oil firms take the lion's share of the income this oil generates.

As a final note, I'd point out that given that there is some uncertainty about how much oil really is there its best to apply the precautionary principle and assume we are approaching the peak oil point in the near future, and take steps to reduce our dependence on oil as quickly as possible. In addition, as long as the occupation continues the security situation is likely to remain unstable - an example of a geopolitical feedback loop in action that serves to keep actual production below theoretical limits.

On a related note, if Iraqi production capacity can be ramped up to the levels mentioned above the country will replace Saudi Arabia as the world's swing producer - giving the country (both the government and those groups able to disrupt production in similar fashion to the rebels operating in Nigeria) a large amount of influence over global oil prices.

People say we’re not fighting for oil. Of course we are. They talk about America’s national interest. What the hell do you think they’re talking about? We’re not there for figs - Republican Senator Charles Hagel (2007)

Cross-posted from Peak Energy.

This is both good and bad.
The good is that we may have some breathing space, and I hope it can be sensibly used.

Bad in that if we will get more of the same and the social effects of decline will be unmitigated by government, so our ultimate destiny is merely delayed.

If the 350 is right it will mean that we still have 50% or better of extractable oil left - (super staw technology has allowing us to pump more than half before reaching a peak, and leading to steep decline rates) and so the cliff pushed back a little.

The time for getting the resource on the market will however not delay peak, nor its concomitant economic wreckage.

Oil powers military might and so unfortunately the middleast will have years of agony as the bully boys clash for their lifeline!!

The introductory section in the book includes an analysis of the lead up to the original Hubberts Peak (of US oil production) and presents a range of estimates for world ultimately recoverable oil reserves - all around the 2 billion barrel mark still predicted by the ASPO.

Wow, so my jerry can of gasoline is worth ca. $15,000 USD?

Great piece, Gav. Thing I wonder about Iraq's fields is, if the country's so bountiful, why are all the projects dinky pools like Tawke or workovers of East Baghdad, Kirkuk, etc.? Are there hundreds of billions of barrels waiting in simple reserve growth? If that's the case, it's going to be rough going - in the waining days of Hussein they were reinjecting fuel oil into fields, damaging them severely.

Doh ! Thanks dude - fixed (sorry - your jerrycan is still near worthless).

In the waning of Hussein's regime the whole system was dysfunctional and they had no way of getting hold of gear to fix it.

As for "reserve growth", my point is the reserves were there all along - but the information about them was deliberately hidden.

See the Aleklett post I link to lower down showing how quickly official reserves jumped when the Iraqis did their own crude exploration work - and note how many areas remain largely unexplored, even those known to be highly prospective.

So where are these Secret Hidden Super Giant Reserviors? The map you provided shows no evidence of their existence. Somebody must know where they are, right? The geology of the region is very well known, certainly all the good prospects have been explored and developed, I do not believe the IPC would have just developed the "lesser" prospects and hid in the dessert a couple of Ghawars. Could it not be this is all a myth that has simply grown with each re-telling?

There is no solid evidence here, it's all just opinion and speculation or exaggeration (I don't mean by you btw). While you've done a good job of pulling this all together, and the history is very interesting, it really doesn't go to prove your conclusion that the high estimates are the more likely. Obviously higher output than the present levels would be possible, as you suggest, in a different political reality.

I suspect the fact that you see this potential as moderating the future global decline of oil production is colouring your judgement. It's what you want to believe, and it's what the planners of the Iraq War wanted to believe.

I was careful in my wording in the post to say that I have no proof that reserves are as large as I think they are.

I think its clear that other people also think the same thing, though they could also be wrong.

It would be very interesting to see the data the Iraqi government (and BP and Shell) have - however I doubt that will ever happen - so we'll have to wait a decade or so to see what the truth of it is (as we see how much oil they produce).

".... all the good prospects have been explored and developed..."

why run seismic surveys, why drill exploratory wells ? a good prospect or a bad pospect doesnt mean anything until a well is drilled and tested.

If you are looking through resumes when trying to fill a job, do you decide to bring in the worst candidates for interviews first because "resumes don't tell the whole story"?

With regards to preliminary exploration, false positives are much more likely than false negatives. You start with where oil is more likely to be, whittle that down to where there are good prospects, and do seismic and maybe crop further and the drill the best ones. Money outlay increases dramatically along the way.

i am not ready to say there won't be significant future discoveries, in iraq. are you ?

resumes ? not much of an analog.

It called probability, informed by what is known of the geology. There is a lot more to it than "well, they haven't drilled there yet, so it must be as big as we can imagine".

Do you believe they are going to find the total volume equivalent of a Ghawar? I don't.

no. total discovered developed (remaining), discovered undeveloped and yet to be discovered could easily amount to more than 1 ghawar (ultimate). iraq's remaining may be greater than ksa's.

the pdf dave cohen cites below, claims that only 1/4 of 530 identified prospects (structures)have been drilled.

There are a few factors to keep in mind that invalidate the "all the easy oil has been found" idea:

1. When large fields were found historically, the findings were suppressed (as per Blair's book) - thus all the available data is suspect.

2. Iraq has rarely been in a position to do its own exploration - only for a period from 1973 to 1980 did they conduct a genuine exploratory program of note - during all other periods Iraq has had one form of turmoil or another (along with bouts of low oil prices) preventing a full survey of their resources.

3. During that period (as per Aleklett's link / graph above) they were very successful at finding oil.

4. This success was achieved even though they only had access to 2D seismological techniques, have only drilled shallow wildcat wells and have only touched 125 of 525 promising structures.

5. Recent exploration (where viable given security problems) in Kurdistan has been very successful.

Given all these factors I can't see how anyone could rule out Iraq having substantial, yet to be discovered reserves.

"The map you provided shows no evidence of their existence."

it looks like a complex area, so how can anyone assume that all the prospects have been drilled, or even identified ?

looks like a promising geological area, needs "a little" land work.

can any sane person deny that the invasion of iraq was based upon oil ?

oh yeah..... i forgot the search for wmd's, freedom and democracy, fighting the terrorists "over there" or the exhilaration of hanging a despot from a crude scaffold.

How sane or credulous did you have to be to buy any of those explanations? They all carried about the same credibility to me as the ads for Magic tricks and Moneymaking schemes in my Comic Books.

But maybe you were using sarcasm.. wasn't sure..


but a lot of people did believe including a majority in congress.

You have to understand, a lot of Americans can be kind of strange sometimes. Don't know why exactly. They just get funny ideas about the world and their place in it.

In the news: Beijing, Baghdad sign deal to develop Iraqi oil field

BEIJING (RIA Novosti) - China and Iraq have signed a deal to jointly develop an oil field in Iraq, the Xinhua news agency said on Tuesday.

Under the $2.9-billion deal, China National Petroleum Corporation (CNPC) will help develop the al-Ahdab oil field in eastern Iraq’s Wasit province.

“This is an important participation from the Chinese side to develop the Iraqi oil fields, and we are looking forward for more participation in rebuilding Iraq,” the agency quoted Iraqi Oil Minister Hussein al-Shahristani as saying at the signing ceremony.

100 kb/d, part of which is earmarked for electrical generation.

It seems the south is where most of the initial development will happen, but there is a lot of action (in terms of exploration and discoveries) going on in Kurdistan where the security situation is less dire :

here's another discussion on kurdistan:

Good to see you're not afraid to tackle the tough gigs Gav :-)

This takes a lot of time and effort folks.. feel free to spread the word:

Reddit Politics

Reddit Business

Thanks Phil.

These sorts of posts tend to make me unpopular with lots of people but I think a lot of the history is important to understand if you want to comprehend what is going on and what our options are in future.

Big Gav,

Great piece. Well done! The tension created by compiling and disseminating compelling information is precisely why it's so important. If it were universally popular, it would be shallow and empty. Don't worry about it.

I'll need to read this again and watch the Iraq endgame more closely.

Great analysis Big Gav, wish I had more technical/ historical know how on the matter to comment some more.

Big Gav -- I want to add my heartfelt and enthusiastic thanks as well!

I have not responded until now, as I took a fair amount of time to follow links you provided, and do the reading there. I also checked out a couple of links provided by folks in comments posted in response to your article. Plenty of good reading! But also the reading takes time.

At any rate, this is one of the best posts I've read on any TOD site in some time.

I feel less isolated after reading your keypost article and many of the responses. I tend to agree with E.O. Wilson -- as you may be tired of me pointing out by now, but I think that his analysis of our species is spot on!

Wilson believes that our species has hit the planet with the force of a huge meteor strike, or of other catastrophes which have caused the great die-offs of life on the planet. Our species is causing the 6th Great Extinction.

Wilson's description of our species is profound:

"Here is a chimera, a new and very odd species come shambling into our universe. A mix of stone age emotion, medieval self-image, and godlike technology. The combination makes the species unresponsive to the forces that count most for its own long term survival."

Wilson is a brilliant scientist and a poet as well. That last sentence still sends a chill up my spine.

When I think of how we approach petroleum as a resource, I always think of the above quote from Wilson's recent short book "The Creation."

Good work with this article, Big Gav! May many more people take time to chew on this, make changes, and encourage others to come to grips with these issues as well.

A peaceful powerdown does not seem within reach at this time, IMHO, but it is seems essential to our survival. Jay Hanson's burning question is: "Is war the only answer?" So far war is the only answer we humans have put forward to the predicament we are in at this time. Our warmaking will surely destroy the ecological niche we inhabit, and will rend the thin fabric of life that envelopes the earth such that it will be hostile to many life forms.

E. O. Wilson (or was it Lovelock) has commented to this effect: if we want to see what the earth will look like in a matter of decades we might simply take alook at the landscape of Mars.

Was there life on Mars? Intelligent life? Is there intelligent life on earth?

Hopefully the yeast will evolve into something more intelligent next time...

Once the troops are out of Iraq, she'll no longer have a gun to her head with a list of demands being yelled at her. Things are going to be very interesting once the troops are pulled out.

I don't think you, or any of us, are going to live to see the (US) troops withdrawn from Iraq, Obama's (uncertain) intentions notwithstanding. We'll leave when the oil runs dry, not before.

Either until the oil runs out or our banks go totally bust. Its really hard to tell which will happen first. I don't think that even a large army drafted in the aftermath of an economic meltdown would be able to dominate Iraq without the advantage of the most sophisticated and expensive modern weapons, which wouldn't be available if the US was broke.

This is my thought as well. Just who is going to pay for the military presence in Iraq. taxpayers? foriegn gov's? I do not see the consumptive (being consumers of all things related to and made from petroleum) side being able to sustain the demand, with the largest concern from the debt problems that are truthfully world wide.

The financial gimmickry in banks lending practices lead you to realize they were propping up their financial "reward" system. A person is bombarded with the idea that greed is the major reason banks lent in "creative" ways. While this is without doubt true it masks an under reported, underlying economic reality. They didn't have any choice- if you want to keep the party going. Assets like houses and cars are beyond the reasonable means of a large segment of the population, hence Alt-A, no-doc, subprime lending. Certain portions of the population went along with this idea, hoping to get rich, others to live beyond their means, but the reality is that the money wasn't there, so it had to be loaned to keep the party going.

Now having lent money on terms and to people which should not have happened, we are in the self reinforcing downdraft that they have been trying to avoid. The panicky movements by business and gov. leaders in the US should send a clear warning shot across the bow. We are in deep trouble and they know it. It also is getting very clear that the fingers are pointing to the guys on top. They have killed the goose (consumer)that lays their golden eggs. It looks to me like this is the last fleecing of the citizenship. Teddy Roosevelt was one who understood the need to keep the underclasses financially health. It is silly in a child like way how our "leaders" are acting. "We need to stimulate lending." Even the news show are starting to mock this inane reasoning. The people of all countries need smarter leadership, and we desperately need to get lobbyists leashed. My guess is that we will remain divided over certain "key points" like abortion or gun laws. I believe these "key points" are kept in our attention "like opiate to the masses" to distract us from the more important issues like finance and energy.

You've nailed a lot of hammer-heads with that one. Right one.

Good article from Truthout today on the iraq oil law and the agreement governing US forces in Iraq in future:

In Final Days, Bush Pushes for Iraq's Oil

I didn't see this posted on the main TOD page. I saw it first on the Energy Bulletin. How come? It's a an excellent piece.

Dunno - it is in the front page queue, but I think the IEA response series is taking precedence...

ASPO's Kjell Aleklett has an interesting post on Iraq as well - Iraq’s oil and the future

Big Gav,

Thank you for your great efforts assembling and sharing this information with us.

Now we need the media to pound this story into peoples' heads, and we need a full revealing of Tricky Dick Dark Lord Cheney's Secret energy task force meetings, and all subsequent secret meetings.

Maybe we should keep Gitmo open, and after free, fair, open, and Constitutional criminal proceedings, use it to imprison all the President's henchmen and let them rot there for their war crimes.

I am afraid the US military isn't leaving the Iraq anytime soon...McSame's 'stay 1000 years' won't happen, but only because the great collapse will happen first.

The military, as well as Blackwater, DynCorp, Fluor Corp, and all the rest of the mercenaries will profit from this venture for a long, long time. And with the economy in the crapper, the military is already crowing about how young people (AKA 'cannon fodder') are starting to sign up in greater numbers, helping the armed services meet their recruiting goals...just in time to fulfill those campaign promises of increasing the Army and Marines by over 100,000 people.

I wish we could have elected real people of change to break the mold...both Ralph Nader and Ron Paul would have broken the BAU political mold, in different ways...but we will never escape the Republicrat/Demican douploly of failure.

The people don't care about the truth...they just want us to 'get it for them.'

As Luft noted, Iraq's oil production costs are among the lowest in the world (estimated to be around US$1.50 per barrel), but only about 2,000 oil wells have been drilled in Iraq - compared with about 1 million wells in Texas alone, which underscores just how undeveloped the country is as an oil province.

This has been said of Saudi Arabia as well, but it is just a misdirected avenue. Individual well productivities are rather high (several thousand b/d per well), so it takes many fewer wells to drain a field. This is the reason for the low development costs (sans armed guards).

There is undoubtedly undiscovered oil, but Iraq has also been under exploration for over 50 years. There are untested structural anomolies:

but further investigation and drilling and development don't happen at random. The best possibilities are explored first, and that is where the best chance for a big find is. I wouldn't judge too much from the exuberance of the neocons, either.


i wonder how eager a geologist would be to recommend drilling a prospect when the penalty for being wrong could be an appointment with a firing squad.

Interesting piece, thanks.

I don't believe the United States will ever leave Iraq. The best they can hope for is a withdrawal of US combat troops from the urban areas to the many enduring bases that are under construction. The Iraqi people will never be allowed full sovereignty over their country or their oil reserves. This prize is simply to valuable, economically and strategically, to be relinquished.

The Iraq war does look largely motivated by oil, but perhaps not to 'grab it' as much as securing the area for continued production and transport, in particular to the US.

You may call Iraq the greatest prize, but if so, it comes at a formidable cost.

It's true that high level (geo)politics haven't been of much help, to say the least. But things are looking a little bit better for the future, with the next administration actually having devised a reasonably comprehensive energy policy (*gasp*).

let's take just a brief moment to look at the Iraq war from the standpoint of the actual goals, versus the rhetorical reasons we were constantly fed by a complicet media for the war.

The goals were to:

A. Secure valuable oil for US & world consumption.
B. Assist major US Corporations to reap the rewards of acquiring that oil.
C. Increase stock value and dividend returns for Defense stock held by the Carlyle Group, headed by his Father, George H. Bush Sr., i.e, for the Bush family fortune.
D. Remove Saddam from power.

The manufactured reasons for the war:

1. WMD, even though evidence indicates (from tapes of Colin Powell) that the Bush Admin. knew it had all gone past the date when it would still be toxic. Secondly, the UN never found any WMD prior to the decision to start the war, indicating WMD was not the real reason for the war.

2. When it appeared that WMD might not ever be found, the reason switched to changing the Iraqi govt. to a democracy, with the greater 'philanthropic' intent of spreading democracy like a chain reaction throughout the region.

3. When public sentiment waned on the prospect of spreading democracy throughout the Middle East, the reason became the need to honor the dead (soldiers) by achieving victory.

If you noticed, there is no connection whatsoever between the actual goals and the manufactured reasons for the Iraqi War, which means the American people were duped. And worse yet, they were manipulated to paste bumper stickers on their vehicles that showed the symbol and wording; support the troops. This slogan meant if you were against the war, you were automatically against the soldiers. The soldiers were assigned in this manner the desire and intest of winning the war. So if you had a problem with that goal, then you are against the soldiers, not the Administration. And how could you be so unpatriotic that you would not support the troops! And if you told someone sold on the propaganda that you were against the war, but at the same time for the safety of the troops, then you were scoffed at with disbelief.

It was a ploy that worked better than any other propaganda effort in the history of humankind. George W. Bush played the American people like he was ringing a bell.

And now were being spoon fed by some Republican fatcat that we are awash in Iraqi oil on a mass scale that hasn't even been confirmed yet. When will people learn?

Well - I hope you don't think I'm a Republican fatcat (admittedly all the "war is about oil" quotes were from conservatives) - most Republicans tend to view me as either a part of some socialist conspiracy or as a libertarian kook (depending on what angle they are viewing me from).

The key study used with all the large Iraqi oil reserves numbers (other than those from the Iraqi government) are from the Brooking Institution - which I believe used to be (and may still be) viewed as a strongly Democratic organisation.

Big Gav,

My apologies, I absolutely was not accusing you of being a U.S. Republican right-wing nut.

We are tuned to the same wavelength here.

I started out so long ago calling myself a Republican and voting that way, but, over time, I adopted what I feel is a more realistic view of how the World works and first became a Democrat, and several years ago finally settled down as a registered Independent. I would and do occasionally vote for Republicans if I feel they are the most qualified for the job at hand. I wish Chuck Hagel would be US Secretary of Defense.

I served a career in the US military and still move in those waters, and my progressive politics are definitely the minority report in those circles. I thought John McCain was a good pick back in 2000 when he ran against our current leader, but McCain transformed himself into a jingoistic sloganeering vacuous idiot during this last presidential campaign. His pick for potential Vice President was astoundingly poor.

Many people who identify as Republicans are very nice, if to varying degrees, deluded people. There has evolved a large subset of Republicans, though, who have drunk the Rush Limbaugh/other rabid talk show hosts' Kool-aide and can't seem to use logic any more.

THese folks only seem to care about our government controlling peoples' social/personal lives and seem beholden to big oil and are utterly, permanently blind to any peak oil and/or environmental issues at all.

Great post here...too bad the 'Mainstream Media' will not conduct a week-long television expose using this material. Unfortunately most Americans wouldn't be bothered to watch and would tune in to sporting events, inane 'comedies', or the latest celebrity gossip drivel, or to Fox News, where they no doubt would be busy refuting any peak oil and environmental information with people who talk real loud and fast who make a point of wearing their US flag lapel pins and denouncing anyone who dares question the American dream of BAU forever.

Keep up your good work please!


Solid post!

My only question is: why do you say that the VP pick was his? From my limited knowledge, I have seen Mr. McCain as an honorable person so either he morphed into a whore extrordinaire or the decision was made by others.

What is your basis for stating that it was his pick?

There is no malice or accusation here, I just need more information,



Just my guessing, but the horrified reactions (obvious but suppressed as much as possible) from all the usual republican talking heads pretty much confirmed to me that it wasn't the mainstream republican process which selected Palin. So if not McCain personally, or at least his close team with his knowledge and assent, then who / how?

No offense intended to you personally Big Gav.

Excellent synopsis!

The astounding part that leads me to lose hope is the sheer number of people who still hew to the false reasons given for the Iraq invasion and occupation, and always will. These are largely the same people who believed all the reasons offered by the government to wage the atrocious Vietnam War and who still believe to this day that if the US had 'doubled down' or 'gone all in' that we would have prevailed there. First, they are wrong, and second, I'm not sure what we would have 'won' in Vietnam.

If and when we withdrawal from Iraq, the propaganda that will be spread is that Democrats are weak on defense, and that the righteous American war-monger 'true Americans' were sold out and betrayed and stabbed in the back by people who hate their country and who sympathize with the enemy (in this case, Islamic/Muslim/Middle-Eastern-looking people). This is the same line of propaganda that the Nazis used to rally their people after the WWI defeat.

It is well past time for the U.S. to get off the Middle Eastern Oil teet, and the oil teet in general.

I could not have said it better, Cslater8. It is a simple fact that a substantial percentage of the largest national and international companies, have and always will, lie, cheat, and steal regardless of the consequences to others. Worse, politicians who are supposed to protect us from these companies are either directly supporting them, ignoring the problems, or belong to such a small minority they can't take action.

Anyone who watched the ludicrous sendoff given by the Senate to Senator Stevens saw just how hard politicians fight to keep the veneer of propriety.

Over 4,000 U.S soldiers (and many soldiers from other countries) have given their lives in Iraq for a cause most did not understand. The number of seriously wounded soldiers is hideous. It's one thing to fight for a cause you believe in. Being used as pawns to sway public opinion is beyond immoral. A fact most people and the press ignore is the incredible number of Iraqi soldiers and civilians that were killed during the invasion of Iraq. Perhaps we need a new number to put this in perspective, the number of barrels of Iraqi oil per death caused by the U.S. Let's graph that:(

I firmly believe all politicians who support voluntary wars must be forced to have their sons and daughters and any close relatives of fighting age, enlist in the army and fight on the front lines for the maximum possible number of tours. Put Bush's daughters in Iraq on the front line. Maybe if they are killed we will finally get to see the coffins of dead soldiers come off the airplanes.

The question of how large the oil reserves are in Iraq is important, but just as important is the number of countries with large amounts of oil that we can invade and control. Iran?

Our energy future will be dictated by how much oil we control in foreign countries. Our economy can't survive $200/barrel or higher oil. It can survive for a while on oil from Iraq that costs less than $2/barrel to produce. With the majority of Iraq's oil, probably a chunk of Iran's, substantial imports from Canada, and for a while longer from Mexico, the U.S. is in the long-term best shape of the major countries to have the money required to invest in alternatives to oil.

The unpleasant fact is the selfish actions of the U.S. with regard to the control of the world's diminishing supply of oil will go down in history as their defining moment. However, If the U.S. was not the world's greatest military power, the country who was would do the same thing. People are people, regardless of the country they live in.

Every once and a while it is important to go beyond the numbers behind peak oil and look at the human cost to date. Just as we can try predict future discoveries of oil we can also try to predict the cost in human lives that will result from those discoveries. Russia did not send their sailors to Venezuela for a vacation.

Iraq has almost begged western oil companies to show some interest. Shell did agree to work on capturing natural gas that's being flared off. But,western oil companies aren't exactly pining for Iraq. Did anyone bother to inform them the Iraqi war was for their benefit?

Ummm - is this sarcasm ? Because each point is the opposite of the truth.

This is all very well, but I would draw your attention to this somewhat more scientific approach

True, this study was done in 2003, but it is far less optimistic. Also, I believe Iraq's fields were damaged because of both the sanctions and the war. I suspect that when we really get to look at it it is going to have far less than people expect.

I was very happy to see this excellent article make it to the main page.

There is no doubt the war was about oil. But it was also about feeding the military-industrial complex. It was Colin Powell who said after the fall of the SU, "I'm running out of enemies".

Of course, that the war was planned before 9-11 is also significant. It could not have begun without something like it. Those who haven't given that any thought need to. And with that in mind one needs to look at every single terrorist incidence with the question "Cui bono?" in mind. There's more than one kind of war. And the war for oil is far, far from over.

Another paper that is less optimistic comes from this correspondence between Jean Laherrere and a colleague.
PDF alert!

The reason why these papers are much less optimistic is because they are based on incomplete and biased data.

Read Blair's book and the Aleklett link above - the historical implications that seem to be lost on some people are that many previous field discoveries were suppressed and more recent exploration programs (in the one, rare, period where Iraq wasn't in some sort of turmoil) have only scratched the surface.

Just look at some of the recent discoveries in Kurdistan - where else are we finding billion barrel fields onshore lately ?

This paper draws its information from an AAPG memoir. It seems to reference the same fields that Alekett mentions.You can see the image here.

The fields with red dots are "giant" (Alekett calls them "elephant" fields.) He doesn't suggest that there are any other giant fields and I don't see any new research in Alekett's article. Are you saying the AAPG is biased? On what grounds?

Here is a link to a table with information about these fields.

I'm hearing on news radio that Iraq parliament has approved a version of status of forces agreement that calls for all 'coalition' forces being out of cities in Iraq by middle of 2009, and out of the whole country by 2011.

With forces out of cities, there is no way US can force a passage of an oil law that is to its liking (and I think no way Obama will carry on the current policy). So, this is shaping up to be a major defeat for the oil majors.

The numbers in this article appear to me to indicate that Iraq oil might push back the eventual post peak decline by about a decade. But if peace in Iraq leads to an economic boom, there will be a consumption rise from 85mbpd to something larger, and, consequently a faster depletion of Iraq oil.

One good thing might be that happy talk about Iraq oil might kill tar sands and oil shale development.

We filled the vacuum left by the French and British.
Next, we will be replaced by China.

They will do much better, then all before them.

It's written in the sand.

GreenGo , go home.

"It's written in the sand."

Why of course it is, because the Chinese are "Ubermen" who not have to deal with the physical reality the rest of the human race has to deal with...and before that it was the super genuis Europeans who had magic economies not subject to any risk of downturn, well that went to hell in a handbasket...and before that it was the almighty Japanese who could do no wrong and before that the 20 foot tall Russian superhumans who did not have the normal desires for wealth, entertainment or sex that mere mortals have but they just lived to FIGHT!

The U.S. may not be any good at conjuring up oil, and are having trouble conjuring up money, but we are masters at conjuring up superhuman villians.


I don't think "It's written in the sand." carries the implication that China is strong or better, or that US is weak or less deserving. Whatever foreign (to Iraq) power helps Iraq develop will have an advantage on the getting price deals on the developed oil, but not much of one and not for long. If it turns out there is a lot of oil, it will be to no one's advantage to engage in military action. And 'written in sand' hardly conveys a picture of indelible writ.

But if US helps Iraq, it will be some of the seven sisters that get the temporary advantage, not the American people, so where is the motive for US government to help? Democaracy building?

During the 2003 ASPO conference

the late Dr. Bakhtiari presented this paper

An extract:

Iraq: the big hope.
All trump cards seem stacked up in Iraq's oil pack. Only the Iraqi people could throw to the wind the present exceptional opportunities, as
a multinational task force of highly qualified oil experts endeavours to place the domestic oil industry on the right tracks. WOCAP simulation results for Iraq are shown in Figure 3. All lead to high capacities of between 5.0 to 6.5 mb/d for the next decade, with a
longer plateau than any other Middle East rival. Probably, maximum possible output would be "the 6.8 mb/d in 2012 for unrestrained Iraqi oil production" predicted by Wood Mackenzie [16]. But the 12 mb/d advanced by former Iraqi oil minister Fadhil al-Chalabi [17] clearly seems excessive, as there are also some dark spots on the rosy Iraqi predicament:
(1) The prolific Kirkuk field (Iraq's northern
kingpin) has already produced some 14 bnb
against an ultimate potential estimated at
16 bnb [18].
(2) The other Iraqi major field of Rumaila has
now been producing for half a century.
(3) Fresh exports facilities will be required,
especially in south Iraq where some 2 mb/d
could be forthcoming for exports from the
three fresh supergiants of West Qurna 2,
Majnoon and Nahr Umar by 2007/8. Possibly
twin 1 mb/d pipelines from the Majnoon
islands to Kharg Island could prove a cheap
solution to that problem.

Unfortunately, all these debates about huge oil reserves and possible production rates are totally academic if the oil is used to continue - let alone grow - our carbon based and credit driven consumer society.

NASA climatologist James Hansen writes in his latest letter to Obama:

All of the slack in the schedule for averting climate disasters has been used up. The time has past for ‘goals’, half-measures, greenwashing, and compromises with special interests. We have already overshot the safe level of greenhouse gases. Things are just beginning
to crumble – Arctic ice is melting, methane is bubbling from permafrost, mountain glaciers are disappearing. We must move onto a different course within the next year

No matter what the reserves are, Iraqi oil will be needed as an energy input for all those massive rail and clean energy projects to decarbonize our economy.

Bush, Cheney, and the U.S. militarily stole the biggest source of lightest and most profitable crude oil in the world by military force, and they are responsible for the deaths and maiming of thousands of innocent civilians, as well as thousands of young American boys and girls. The long term excuse/objective is a military base to steal oil more from the Middle East.

They are completely incompetent and screwed up a totally immoral robbery, resulting in thousands of additional deaths of innocent civilians and American boys and girls.

The motive for all of this is profit for Bush/Cheney and friends and family. Because they don't have the slightest idea of what leadership is, they actually think they are doing something positive.

Real leadership would be informing the world about Peak Oil and trying to find the best way to mitigate the mass fatalities by bring the world together to prepare for Peak Oil impacts.

They could commission someone else to deliver the bad news, like the National Academy of Science, but they are too ignorant to know how to do it. They are afraid to face the public themselves. Have you ever seen someone so fearful of facing the public as George Bush?

These Bush/Cheney types are completely gutless. But telling the truth, they would not be standing out in the cold like union workers on strike. They wouldn't go hungry and wouldn't suffer. They simply don't care about humanity and care only about themselves getting a little more wealth and power.

This is much like Fernando Cortes, Napoleon Bonaparte, leaders of the Roman Empire, or a hundred other empires.

It is so embarrassing that American leaders across the board have ignored these war crimes and so the crimes continue daily; thus U.S. "leaders" will be encouraged to commit more war crimes in the future as the Peak Oil crises worsens.

It's Hernando Cortez, we must get the spelling of this despised, murdering bandit correct! He also wasn't so much an empire leader, as a government-sponsored raider and despoiler of new lands and exotic peoples and their societies.

All very disheartening to watch, even from a moderate distance.

I would like to call your attention to the work of Iraq Revenue Watch (funded by George Soros in 2003).

The best breakdown of Iraqi oil I've seen is in their report Geographical Distribution of Iraqi Oil Fields And Its Relation with the New Constitution.

Look at the summary table on page 8 (111.3 billion barrels in recoverable reserves) and the detailed Tables 1 and 2 (pages 12 and 13).

It is of particular interest that only 24.68 billion of these barrels are from discovered undeveloped fields.

I have the same problem everyone else does -- how to vouch for this data? I will tell you what I believe: if peace broke out and under ideal conditions, Iraq could easily be producing 5-6 million barrels per day.

Since reality dictates otherwise, we must prepare for the worst case.

A last note...

Iraqi petroleum geologists whose work I've read believe the western provinces contain no significant oil, and that's what this IRW report basically says, despite what IHS Energy said in their Iraq Atlas, where they claimed that up to 100 billion barrels could be found out there. What nonsense, but it does coincide neatly with the Cheney Map.