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15 comments on Problems with our oil from Iraq

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Dave Cohen on October 26, 2005 - 11:46pm Permalink | Subthread | Comments top
Having posted on Iraq's dwindling production before, I've got to say that
  • general production and exports are down
  • the fields are in a state of total disrepair
  • if the policy of the US was to secure Iraqi production, it has totally failed
In addition, I will say this. <rant>There is little or no hope that the country with supposedly the 2nd largest reserves in the world (standard figure = 115 bbo) will make a significant contribution to the world oil supply in the indefinite future. Anyone who thinks that geopolitical conditions there will allow orderly recovery and development of the oil fields in Iraq in the next several years is a complete fool. I would further submit that the ill-begotten and foolhardy political policies of the Neocons/Morons that run our government have made this so, they have set this in concrete -- there is nothing we can do about it. That said, I find it ironic that as the world faces a Peak Oil situation, these assholes have jeopardized our supplies from an important OPEC supplier beyond the critical shortfalls we are already facing in the near future. In addition, they have created a totally unstable situation as far as geopolitics goes in the region, thus extending our oil insecurity into areas where it did not exist or was not so critical. Congratulations to the people who made our oil supplies situation much worse than it had to be in a small timeframe. Bravo! Well Done!</rant>
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SJMStrategy on October 27, 2005 - 1:24am Permalink | Subthread | Parent | Comments top
Yes, and this is one of the reasons we (in canada) are expecting the USA to look to us even more so than in the past for SECURE energy supply.  I am going to be discussing policy implications of these developments with some key players next week.  Should be interesting.
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TI on October 27, 2005 - 3:22am Permalink | Subthread | Parent | Comments top
There seems to be a total lack of interest in Iraqi oil. Iraq was supposed to be "awash in oil". There should have been large unexplored fields in the Western Desert. The production from the older fields should have been easy to boost with new technology and investments.

Now the US government knows the truth. Iraq is the only Gulf state where the oil ministry is in the hands of Americans and where they know the real state of affairs. The result: total lack of interest. Even the critics of the war don't like to mention the dismal state of the oil production. The war may take off about 1 mbpd from the world supply - as much as the the hurricanes in GOM. but no one seems to care and complain about the effects on the crude price.

Iraq is a warning sign. From all this we could guess that the real Iraqi reserves are far smaller than officially claimed. The announced new projects were not realistic. It is quite likely that all the Gulf states are in a similiar situation.

But what do these leaks in New York Times and elsewhere mean? There have been some talk about the failure of the national oil companies in boosting supply. The production of all the major private oil companies is decreasing and they would like to get access to the fields of the national companies. Iraq was not a success, but the Iranian crisis is already unfolding.

The reaction to oil supply problems and the perspective of the Peak Oil has so far been invasions (Afghanistand and Iraq), setting up bases (Central Asia and Africa) and covert operations (Venezuela). Only when heavy gasoline taxes are introduced in the US, do I believe in efforts to cut the excessive consumption.

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Stuart Staniford on October 27, 2005 - 5:29am Permalink | Subthread | Parent | Comments top
There's a good article here.. It sounds like there probably is quite a bit of oil, but Iraq has been in a long series of wars and revolutions so the place is rarely stable enough to try and develop it.
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TI on October 27, 2005 - 6:09am Permalink | Subthread | Parent | Comments top
No doubt Iraqi oil production is in a very bad shape, needs investments and could be somewhat higher. Exploding pipelines are not good for oil exports. These thing happen in a war. But otherwise there is this usual talk about increasing capacity a lot in the future. Practically every oil producing country talks optimistically about increasing capacity. They don't like to admit being in decline. It has been very difficult for the UK, even for the US. Countries in decline like insted to talk about the need for huge new investments.

My point was the apparent lack of interest in Iraqi oil. From the article of al-Chalabi we see that capacity increase would come from applying new technology to the mostly old, quite mature fields and repairing the ailing infrastructure. This is not possible during the war, and don't promise easy profits in any case.

The reality is that while experts complain about the possible permamenent destruction of existing capacity by mismanagement and lack of maintenance, nothing is done. It is widely acknowledged now that the war is unwinnable for the US and would continue indefinitely despite of the present political process. The get the Iraqi oil fully online something else would be needed. But obviously the Iraqi oil is not interesting enough to change the course.  

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Stuart Staniford on October 27, 2005 - 7:08pm Permalink | Subthread | Parent | Comments top
There are a bunch of large and medium undeveloped fields: Majnoon, Nahr 'Umar, West Qurna, Halfaiya, East Baghdad, Ratawi, Nasiriya, Khormala, Hamrin, and Gharraf . If you go Google these fields, you'll find details of past development plans for them that have been shelved, and you'll see that getting to 5-6mbpd is not at all unrealistic if the place could be stabilized, and there probably are somewhere in the general range of 50-100 billion barrels or recoverable reserves in the known fields. I very much doubt it will be stable anytime soon.

Here are some links:

The last is particularly interesting.
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Gloomy on October 27, 2005 - 4:30pm Permalink | Subthread | Parent | Comments top
I don't believe that stupid people are allowed to play with billions. For any sane person it was obvious that the picture would look much like this, so there most probably are other explanantion. Consider these:

  1. Stopping the growing China influence in the region. If you can not take it, don't let the competitor take it and position yourself for future control;
  2. Preventing Iraq from starting an euro-denominated oil trade. This is well documented fact;
  3. Current low production may be a bliss in 10 years when everyone who did not pump up like a complete idiot now will have an advantage. In 10 years the country might be in peace (largely unlikely); I am expecting it to be separated in easily controllable states eventually gaining independance (divide and conquer, classics).
  4. Keep a military threat over Saudi Arabia, Iran, Kuwait, Oman etc. in case they decide not to "behave" e.g. pump like hell and sell for dollars.
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15 comments on Problems with our oil from Iraq

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