Iraq Increases Oil Reserves

International Business Times:

War-torn Iraq on Monday reported a sharp increase in its oil reserves to claim second position globally in terms of reserve strength.

Iraq's oil reserves are now 143.1 billion barrels, Iraq Oil Report said quoting Iraqi Oil Minister Hussein al-Shahristani.

“We got these numbers from news studies in Iraq and from the international oil companies (IOCs),” Shahristani said. “And we could say that the most that we got is from what the IOCs provided us, which they were already asked to do such work.”

The current level reflected a 25 percent increase from its previous level of 115 billion barrels, said the report.

The graph above shows the history of proved oil reserves for major middle eastern countries (from BP), along with this new number for Iraq.  The story goes onto add,

Shahristani further added that three quarters of new oil reserves came from an oilfield in West Qurna which is being developed by two consortia- ExxonMobil and Lukoil.

According to the oil ministry, West Qurna oilfield reserves rose to 43 billion barrels from U.S. Energy Information Agency (EIA)’s previous estimate of 21.5 billion barrels, to emerge as the second biggest oilfield in the world.

“The gains that have been achieved from the initial work on West Qurna have been enormous,” said the report quoting Brad Phillips, an economist at IHS Global Insight.

My guess is that Iraq's oil reserves are probably mostly legit.  It is just a guess, because there isn't enough data in the public domain to say for sure, but my gut feeling poking around accounts by old Iraq oil hands is that the oil is there.  By contrast, the work I (and others, especially Euan Mearns) did back in 2007 on Saudi Arabia convinced me that the Saudis are very likely exaggerating theirs.

The story would be that in this graph, when Iraq increased its reserves in 1982, that was real, but then the other countries were, at least in part, making it up and responding to Iraq's change in order to avoid quota losses.

In any case, since this latest reserve expansion is largely tied to a particular field being developed by (comparatively) transparent international oil companies, it's hard to imagine it being illusory.

For past coverage of Iraqi oil issues on this blog, see here, and especially here.