Iraq – First Look

The following report provides an assessment of the December 2009 Iraqi oil auction and discusses some of the underlying difficulties in achieving contracted production volumes.  It is the first in a series of EPRINC reports on the Iraqi petroleum sector and its implications for the world oil market. A PDF version of the report is posted on our website at: www.eprinc.org/pdf/EPRINC-Iraq-FirstLook.pdf

In December 2009, the government of Iraq held a competitive auction for the rights to develop 60 billion barrels (bbls) of proven crude oil reserves across 10 major fields. The output requirements under the awarded contracts yield a production plateau of 9.6 mm b/d by 2017 in addition to current production. By any standard the Iraqi auction represents a major event in the history of the world oil market – it is the largest single transfer of petroleum reserves into the production stream of the oil market since the beginning of the petroleum era. Iraq’s proven reserves are estimated at 115 billion barrels which ranks the country third in proven reserves behind Saudi Arabia and Iran. However, credible estimates of Iraqi reserves suggest Iraq contains over 200 billion barrels of recoverable reserves and potential resources of over 400 billion barrels.

The production commitments for these reserves among the winning bidders, through a contracting vehicle called technical service contracts (TSC), are only partially transparent. It is known that companies will Read More >>>