RESOURCES
OIL
Iraq contains 112 billion barrels of proven oil reserves, the second
largest in the world (behind Saudi Arabia). Iraq's true resource potential
may be far greater than this, however, as the country is largely (90% or
so) unexplored due to years of war and sanctions. Deep oil-bearing
formations located mainly in the vast Western Desert region, for instance,
could yield large additional oil resources (possibly another 100 billion
barrels), but have not been explored. Iraq's oil production costs are
amongst the lowest in the world, making it a highly attractive oil
prospect. However, only 15 of 73 discovered fields have been developed,
while few deep wells have been drilled compared to Iraq's neighbors.
Overall, only about 2,000 wells reportedly have been drilled in Iraq (of
which about 1,500-1,700 are actually producing oil), compared to around 1
million wells in Texas for instance. In addition, Iraq generally has not
had access to the latest, state-of-the-art oil industry technology (i.e.,
3D seismic), sufficient spare parts, and investment in general throughout
most of the 1990s, but has instead reportedly been utilizing questionable
engineering techniques (i.e., over pumping, water injection/"flooding") and
old technology to maintain production.
diagram
Iraqi oil reserves vary widely in quality, with API gravities in the 24o
to 42o range. Iraq's main export crudes come from the country's
two largest active fields: Rumaila and Kirkuk. The southern Rumaila field,
which extends a short distance into Kuwaiti territory, has around 663
wells and produces three streams: Basra Regular; Basra Medium (normally 30o
API, 2.6% sulfur); and Basra Heavy (normally 22o-24o
API, 3.4% sulfur). Basrah Blend normally averages around 32o
API, 1.95% sulfur, but reportedly is worse currently at around 29-30o
API and 2%+ sulfur content. The northern Kirkuk field, first discovered in
1927, has around 337 wells and normally produces 35o API, 1.97%
sulfur crude, although the API gravity and sulfur content both are
reported to have deteriorated sharply in recent months. Kirkuk's gravity,
for instance, has declined to around 32-33o API, while sulfur
content has risen above 2%. Declining crude oil qualities -- and an
increased "water cut" as well -- could be the result of over
pumping as
Iraq attempts to sell as much oil as possible. An additional export crude,
known as "Fao Blend," is heavier and more sour, with a 27o API
and 2.9% sulfur.
more...
Production
Following Iraq's invasion of Kuwait and the embargo on Iraqi oil exports,
Iraqi oil production fell to around 300,000 barrels per day (bbl/d) (from
3.5 million bbl/d in July 1990). For the first 11 months of 2002, Iraqi
crude oil production averaged 2.02 million bbl/d, down from about 2.45
million bbl/d in 2001 (and 2.69 million bbl/d in 2000), with large weekly
and monthly fluctuations. Iraqi monthly oil output was lowest in April
2002, at 1.2 million bbl/d, and highest in February 2002, at 2.5 million
bbl/d. Iraqi officials had hoped to increase the country's oil production
capacity to 3.5 million bbl/d by the end of 2000, but did not accomplish
this given technical problems with Iraqi oil fields, pipelines, and other
oil infrastructure. Iraq also claims that oil production capacity
expansion has been constrained by refusal of the United Nations to provide
Iraq with all the oil industry equipment it has requested.
Oil industry experts generally assess Iraq's sustainable production
capacity at no higher than about 2.8-2.9 million bbl/d, with net export
potential of around 2.3-2.5 million bbl/d (including smuggled oil). In
comparison, Iraq produced 3.5 million bbl/d in July 1990. Approximately 2
million bbl/d of Iraq's production capacity comes from oil fields in the
southern part of the country, particularly North and South Rumaylah (1.3
million bbl/d), West Qurnah (225,000 bbl/d), Az Zubair (220,000 bbl/d),
Majnoon (50,000 bbl/d), Jabal Fauqi (50,000 bbl/d), Abu Ghurab (40,000
bbl/d), Buzurgan (40,000 bbl/d) and Luhais (30,000 bbl/d). Iraq's
remaining oil production capacity is located in the northern and central
fields of Kirkuk (720,000 bbl/d), Bai Hassan (100,000 bbl/d), Jambur
(50,000 bbl/d), Khabbaz (40,000 bbl/d), Saddam (30,000 bbl/d), East
Baghdad (20,000 bbl/d), and 'Ayn Zalah (10,000 bbl/d).
Among other challenges in maintaining, let alone increasing, oil
production capacity, is Iraq's battle with "water cut" (damaging intrusion
of water into oil reservoirs) especially in the south. Say bolt
International has reported that Iraq has been able to increase its oil
production through use of short-term techniques not generally considered
acceptable in the oil industry (i.e., "water flooding," injection of
refined oil products into crude reservoirs). A U.N. report in June 2001
said that Iraqi oil production capacity would fall sharply unless
technical and infrastructure problems were addressed.
more...
Exports
U.N. Resolution 986 (April 1995) allows Iraq to sell specified dollar
amounts of crude oil over six-month periods, in part for the purchase of
humanitarian supplies ("oil-for-food") for distribution in Iraq under U.N.
supervision. Under the Phase XII renewal which ended November 25, 2002,
the U.N. Security Council makes use of an extensive list of "dual-use"
items (goods that could have military as well as civilian use). Iraq is
allowed to make use of "oil-for-food" revenues to purchase items not on
the list. The current 6-month phase (Phase XIII) began on December 4, 2002
after a two-week delay over the goods review list issue. Official
"oil-for-food" exports from Iraq were about 1.55 million bbl/d in December
2002 and 1.79 million bbl/d in January 2003.
Overall, about three-fourths of the proceeds from "oil-for-food" sales
are used to purchase humanitarian goods for Iraq, while 25% are earmarked
for reparations to Gulf War victims, pipeline transit fees for Turkey
(which claims that the embargo on Iraq has cost Turkey more than $35
billion since 1990), and funding for U.N. weapons monitoring activities.
During 2001, Iraq averaged official (i.e., U.N. monitored) net oil exports
of around 2 million bbl/d, although this number fluctuated greatly through
the year, and fell sharply during the first part of 2002 (to under 1.5
million bbl/d during the first 9 months of the year; see graph). The
reduced volume of Iraqi exports in much of 2002 appears to have been a
result of at least two main factors: 1) Iraq's unilateral one-month
embargo of oil exports in April 2002 ostensibly in support of the
Palestinians; and 2) pressure by the United States and other countries to
clamp down on Iraq's practice of charging an illegal "surcharge" on their
U.N. -authorized oil exports (see below for more on this subject). Since
mid-December 2002, however, Iraq has increased its production and exports
sharply, with production reportedly reaching 2.6 million bbl/d bbl/d,
"oil-for-food" exports at 1.8 million bbl/d, and illegal exports at around
400,000 bbl/d.
During the first eleven months of 2002, the United States imported an
average of 449,000 bbl/d from Iraq. In January 2003, approximately 1.2
million bbl/d of Iraqi oil went to the Americas (up from 910,000 bbl/d in
December 2002 and 515,000 bbl/d in November), while 430,000 bbl/d went to
Europe and 140,000 bbl/d to Asia. To some extent, increased Iraqi oil
exports to the Americas have helped fill the loss created by a major oil
strike and general unrest in Venezuela beginning in December 2002.
In addition to U.N.-sanctioned oil exports to Jordan, which are
currently carried by truck (plans for a 150,000-bbl/d pipeline to Jordan's
Zarqa oil refinery were approved by Jordan's cabinet in December 2001, and
Jordan reportedly has received more than 30 offers from firms interested
in building the line -- with possible completion in 2004), there have been
persistent reports that Iraq has smuggled 200,000-400,000 bbl/d of crude
oil and products via a number of routes. These include: 1) to Turkey (as
high as 100,000-150,000 bbl/d, mainly of fuel oil) by truck through the
Habur border point (reportedly, this smuggling was stopped from September
18, 2001 through January 7, 2002); 2) to Jordan (possibly 10,000-30,000
bbl/d above domestic needs) by truck; 3) to Syria (150,000-200,000 bbl/d
or more), mainly via the Kirkuk-Banias pipeline, with smaller volumes
possibly moving via a railway line from Mosul to Aleppo; 4) to Iran along
the Gulf coast and via Qais Island; and 5) to Dubai with the use of small
tankers sailing from Umm Qasr. Press reports have estimated that these
illegal shipments may be providing Iraq with as much as $600 million-$2
billion per year in illegal revenues, while a U.S. General Accounting
Office study released in May 2002 estimated that Iraq had earned $6.6
billion from oil smuggling and illegal surcharges from 1997 through 2001.
In late October 2001, the U.N. Sanctions Committee began imposing a
so-called "retroactive pricing" mechanism (proposed by the UK and
supported by the United States) to alter the way in which Iraqi oil prices
are set. The United States and the UK were concerned that Iraq was using
oil price fluctuations to impose a de facto surcharge on oil purchasers,
and that this money was going directly to the Iraqi government outside of
U.N. control. This was also part of a continuing effort by the United
States, the UK, and others to stop Iraq from forcing buyers to pay a
$0.30-$0.60 per barrel surcharge, paid directly to the Iraqi government.
more...
Oil Field Development, War, and Current Status
Iraq's southern oil industry was decimated in the Gulf War, with
production capacity falling to 75,000 bbl/d in mid-1991. The largest
producing oil field in this region is Rumaila. The war resulted in
destruction of gathering centers and compression/degassing stations at
Rumaila, storage facilities, the 1.6-million bbl/d (pre-war capacity) Mina
al-Bakr export terminal, and pumping stations along the 1.4-million bbl/d
(pre-war capacity) Iraqi Strategic (North-South) Pipeline. Seven other
sizable fields remain damaged or partially mothballed. These include
Zubair, Luhais, Suba, Buzurgan, Abu Ghirab, and Fauqi. Generally speaking,
oilfield development plans have been on hold since Iraq's invasion of
Kuwait, with Iraqi efforts focused on maintaining production at existing
fields.
The Kirkuk field, with over 10 billion barrels in remaining proven oil
reserves, forms the basis for northern Iraqi oil production. Bai Hassan,
Jambur, Khabbaz, Saddam, and Ain Zalah-Butmah-Safaia are the other
currently-producing oil fields in northern Iraq. An estimated 60% of
Northern Oil Company's (NOC) facilities in northern and central Iraq were
damaged during the Gulf War. In 2001, output from all northern fields (Kirkuk,
Bai Hassan, Jambur, Khabbaz, Saddam, Safiya, and 'Ain Zalah/Butnah) was
around 1 million bbl/d.
Another major Iraqi oil field is the 11-billion barrel East Baghdad
field, which came online in April 1989. This centrally-located field
currently produces 50,000 bl/d of heavy, 23o API oil as well as
30 million cubic feet per day (Mmcf/d) of associated natural gas.
In March 2000, U.N. Security Council agreed to double the spending cap
for oil sector spare parts and equipment (under Resolution 1175 of June
20, 1998), allowing Iraq to spend up to $600 million every 6 months
repairing oil facilities. U.N. Secretary General Kofi Annan had warned of
a possible "major breakdown" in Iraq's oil industry if spare parts and
equipment were not forthcoming. In August 2000, a senior Iraqi oil
official stated that delays by the United Nations in approving contracts
to upgrade Iraq's oil sector were threatening production levels. The
United States has said that the $300 million should be used only for
short-term improvements to the Iraqi oil industry, and not to make
long-term repairs. Iraq's oil sector distribution plan for the
"oil-for-food" program's 12th phase reportedly included $350 million for
upstream contracts, including development work on the Hamrin, Suba, and
West Qurna fields.
Currently, the United States maintains unilateral economic sanctions
against Iraq, including Executive Order #12722 (August 2, 1990) imposing a
complete trade embargo, and Executive Order #12724 (August 9, 1990)
imposing additional restrictions. Under U.S. sanctions, goods or services
cannot be imported from or exported to Iraq, with the exception of the
U.N. "oil-for-food" program.
more...
Post-U.N. Sanctions Development Plans
In December 2002, the Council of Foreign Relations and the Baker Institute
released a report on Iraq's oil sector. Among other things, the report
concluded that: 1) Iraq's oil sector infrastructure is in bad shape at the
moment, being held together by "band-aids," and with a production decline
rate of 100,000 bbl/d per year; 2) increasing Iraqi oil production will
require "massive repairs and reconstruction...costing several billions of
dollars and taking months if not years;" 3) costs of repairing existing
oil export installations alone would be around $5 billion, while restoring
Iraqi oil production to pre-1990 levels would cost an additional $5
billion, plus $3 billion per year in annual operating costs; 4) outside
funds and large-scale investment by international oil companies will be
needed; 5) existing oil contracts will need to be clarified and resolved
in order to rebuild Iraq's oil industry, with any "prolonged legal
conflicts over contracts" possibly "delaying the development of
important fields in Iraq;" and 6) any "sudden or prolonged shut-down" of
Iraq's oil industry could result in long-term reservoir damage; 7) Iraq's
oil facilities could easily be damaged during any domestic unrest or
military operations (in early February 2003, the Patriotic Union of
Kurdistan claimed that Iraqi soldiers were mining oil wells in the north
of the country in anticipation of war); and 8) given all this, a "bonanza"
of oil is not expected in the near future.
According to the Middle East Economic Survey (MEES), problems
at Iraqi oil fields include: years of poor oil reservoir management;
corrosion problems at various oil facilities; deterioration of water
injection facilities; lack of spare parts, materials, equipment, etc.;
damage to oil storage and pumping facilities; and more. MEES
estimates that Iraq could reach production capacity of 4.2 million bbl/d
within three years at a cost of $3.5 billion, and 4.5-6.0 million bbl/d
within seven years.
As of October 2002, Iraq reportedly had signed several multi-billion
dollar deals with foreign oil companies mainly from China, France, and
Russia. Deutsche Bank estimates $38 billion total on new fields -- "Greenfield"
development -- with potential production capacity of 4.7 million bbl/d if
all the deals come to fruition (which Deutsche Bank believes is highly
unlikely). Iraq reportedly has become increasingly frustrated at the
failure of these companies actually to begin work on the ground, and has
threatened to no longer sign deals unless firms agreed to do so without
delay. Iraqi upstream oil contracts generally require that companies start
work immediately, but U.N. sanctions overwhelmingly have dissuaded
companies from doing so. In 1992, Iraq announced plans to increase its oil
production capacity to over 6.3 million bbl/d following the lifting of
U.N. sanctions. This plan, which was to be accomplished in three phases
over a five-year period, assumed billions of dollars worth of foreign
investment. Much of the production was to come from giant fields in the
south (Halfaya, Majnoon, Bin Umar, West Qurna), plus the Mishrif reservoir
(Luhais, North and South Rumaila, Zubair, etc.), East Baghdad, and others.
Russia, which is owed billions of dollars by Iraq for past arms
deliveries, has a strong interest in Iraqi oil development. This includes
a $3.7 billion, 23-year deal to rehabilitate Iraqi oilfields, particularly
the 11-15 billion barrel West Qurna field (located west of Basra near the
Rumaila field). West Qurna is believed to have production potential of
800,000-1 million bbl/d. In a surprising and somewhat puzzling
development, in mid-December 2002 the Iraqi Oil Ministry announced that it
was severing its contract with the Lukoil consortium on West Qurna due to
"failure to comply" with contract stipulations. Specifically, the Iraqis
cited Lukoil's failure to invest a required $200 million over three years.
Two other, smaller, stakes in West Qurna by Russian companies Zarubezhneft
and Mashinoimport reportedly were left intact. In addition, three
exploration and production deals were signed between Iraq and Russian
companies (Soyuzneftegaz, Stroytransgas-Oil, and Tatneft, to develop the
100,000-bbl/d Rafidain field, the Western Desert's Block 4, and the
Western Desert's Block 9, respectively). Despite all this, Russia's
Foreign Ministry said that it viewed the Iraqi decision on Lukoil and West
Qurna "with regret." In mid-February 2003, following a month of talks
between the two sides aimed at reversing Iraq's decision, the Iraqis
announced that its decision to cancel the Lukoil deal was "finished and
the contract has been scrapped."
In October 2001, a joint Russian-Belarus oil company, Slavneft, signed
a $52 million service contract with Iraq on the 2-billion-barrel,
Suba-Luhais field in southern Iraq. Full development of Suba-Luhais could
result in production of 100,000 bbl/d (35o API) at a cost of
$300 million over three years. As of March 2002, Slavneft reportedly was
awaiting approval from the United Nations to drill 25 wells as Luhais.
The Saddam field contains 3 billion barrels of oil and 5 trillion cubic
feet (Tcf) of associated gas. Iraq is seeking foreign assistance for a
second-phase Saddam development, which would raise oil production capacity
to 50,000 bbl/d, as well as 300 Mmcf/d of gas. In early April 2001,
Russia's Zarubezhneft received U.N. approval to drill 45 wells in the
Saddam field, plus Kirkuk and Bai Hassan, as part of an effort to reduce
water incursion into the fields.
The largest of Iraq's oilfields slated for post-sanctions development
is Majnoon, with reserves of 12-30 billion barrels of 28o-35o
API oil, and located 30 miles north of Basra on the Iranian border. French
company TotalFinaElf reportedly has signed a deal with Iraq on development
rights for Majnoon. Majnoon was reportedly brought on stream (under a
"national effort" program begun in 1999) in May 2002 at 50,000 bbl/d.
Future development on Majnoon ultimately could lead to production of
450,000 bbl/d within two years or so at an estimated (according to
Deutsche Bank) cost of $4 billion. Eventually, Majnoon could produce
significantly more oil than that, possibly well above 1 million bbl/d.
In July 2001, angered by France's perceived support for the U.S. "smart
sanctions" plan, Iraq announced that it would no longer give French
companies priority in awarding oil contracts, and would reconsider
existing contracts as well. Iraq also announced that it was inclined to
favor Russia, which has been supporting Iraq at the U.N. Security Council,
on awarding rights to Majnoon and another large southern oil field, Bin
Umar. As of February 2003, Russian company Zarubezhneft reportedly was
negotiating a contract to develop Bin Umar. The status of TotalFinaElf,
which had previously expressed interest in the field, was not clear. In
February 2003, TotalFinaElf said that it was confident regarding its
Majnoon contract, regardless of the Iraqi government in power.
The 2.5-5 billion-barrel Halfaya project is the final large field
development in southern Iraq. Several companies (BHP, CNPC, Agip)
reportedly have shown interest in Halfaya, which ultimately could yield
200,000-300,000 bbl/d in output at a possible cost of $2 billion.
Smaller fields with under 2 billion barrels in reserves also are
receiving interest from foreign oil companies. These fields include
Nasiriya (Eni, Repsol), Tuba (ONGC, Sonatrach, Pertamina), Ratawi (Shell,
Petronas, CanOxy), Gharaf (Mashinoimport, Rosneftegasexport), Amara (PetroVietnam),
Noor (Syria), and more. Italy's Eni and Spain's Repsol appear to be strong
possibilities to develop Nassiriya. more...
Oil Export Pipelines/Terminals
Iraq's oil export infrastructure (pipelines, ports, pumping stations,
etc.) were damaged in both the Iran-Iraq War as well as Operation Desert
Storm (1991). Currently, the 600-mile, 40-inch Kirkuk-Ceyhan pipeline is
Iraq's largest operable crude export pipeline. This Iraq-Turkey link
consists has a fully-operational capacity of 1.1 million bbl/d, but
reportedly can handle only around 900,000 bbl/d. A second, parallel,
46-inch line has an optimal capacity of 500,000 bbl/d and was designed to
carry Basra Regular exports, but at last report was inoperable. Combined,
the two parallel lines have an optimal capacity of 1.5-1.6 million bbl/d.
On August 20, 1998, Iraq and Syria (which reopened their border in June
1997 -- after a 17-year closure -- for trade and official visits) signed a
memorandum of understanding for the possible reopening of the 50-year-old,
rusting Banias oil pipeline from Iraq's northern Kirkuk oil fields to
Syria's Mediterranean port of Banias (and Tripoli, Lebanon). As of October
2002, the pipeline reportedly was being used (see above), and there also
was talk of building a new, parallel pipeline as a replacement.
In order to optimize export capabilities (i.e., to allow oil shipments
to the north or south), Iraq constructed a reversible, 1.4-million bbl/d
"Strategic Pipeline" in 1975. This pipeline consists of two parallel
700,000-bbl/d lines. The North-South system allows for export of northern
Kirkuk crude from the Persian Gulf and for southern Rumaila crude's to be
shipped through Turkey. During the Gulf War, the Strategic Pipeline was
disabled after the K-3 pumping station at Haditha as well as four
additional southern pumping stations were destroyed.
In the Persian Gulf, Iraq has three tanker terminals: at Mina al-Bakr,
Khor al-Amaya, and Khor az-Zubair (which mainly handles dry goods and
minimal oil volumes). Mina al-Bakr is Iraq's largest oil terminal, with
four 400,000-bbl/d capacity berths capable of handling very large crude
carriers (VLCCs). Gulf War damage to Mina al-Bakr appears to have been
repaired in large part and the terminal currently can handle up to 1.2-1.3
million bbl/d. A full return to Mina al-Bakr's nameplate capacity
apparently would require extensive infrastructure repairs. Mina al-Bakr
also is constrained by a shortage of storage and oil processing
facilities, most of which were destroyed in the Gulf War.
Iraq's Khor al-Amaya terminal was heavily damaged during the Iran-Iraq
War (and completely destroyed during Operation Desert Storm in 1991) and
has been out of commission since then. As of March 2001, reports indicated
that Iraq had largely completed repairing two berths at Khor al-Amaya.
Upon full completion of repairs, Iraq projects Khor al-Amaya's capacity
will rise to 1.2 million bbl/d, and will help prevent delays at Mina al-Bakr
while repairs are conducted there.
more...
Refining
Iraq's refining capacity as of January 2003 was believed to be over
417,000 bbl/d, compared to a pre-Gulf War, nameplate capacity of 700,000
bbl/d. Iraq has 10 refineries and topping units. The largest are the
150,000-bbl/d Baiji North, 140,000-bbl/d (or higher) Basra, and
100,000-bbl/d Daura plants. During the Gulf War, both Baiji in northern
Iraq as well as the refineries at Basra, Daura, and Nasiriyah were
severely damaged. Today, a lack of light-end products, low quality
gasoline, and rising pollution levels because of a lack of water treatment
facilities are some problems faced by Iraq's refining sector.
Post-sanction plans include attracting foreign investment to perform
refinery upgrades (Iraq has identified dozens of such projects) and to
build a new $1-billion, 290,000-bbl/d "Central" refinery near Babylon.
NATURAL GAS
Iraq contains 110 trillion cubic feet (Tcf) of proven natural gas
reserves, along with roughly 150 Tcf in probable reserves. About 70% of
Iraq's natural gas reserves are associated (i.e., natural gas produced in
conjunction with oil), with the rest made up of non-associated gas (20%)
and dome gas (10%). Until 1990, all of Iraq's natural gas production was
from associated fields. In 2001, Iraq produced 97 billion cubic feet (Bcf)
of natural gas, down drastically from peak output levels of 700 Bcf in
1979. Iraq plans to increase its natural gas output in order to reduce
dependence on oil consumption.
Within two years after the lifting of U.N. sanctions, Iraq hopes to
produce 550 Bcf, and within a decade, Iraq aims to be producing about 4.2
Tcf of natural gas annually. Since most of Iraq's natural gas is
associated with oil, progress on increasing the country's oil output will
directly affect the gas sector as well. Associated gas often is simply
flared off. Significant volumes of gas also are used for power generation
and reinjection for enhanced oil recovery efforts.
Main sources of associated natural gas are the Kirkuk, Ain Zalah, Butma,
and Bai Hassan oil fields in northern Iraq, as well as the North and South
Rumaila and Zubair fields in the south. The Southern Area Gas Project was
completed in 1985, but was not brought online until February 1990. It has
nine gathering stations and a larger processing capacity of 1.5 billion
cubic feet per day. Natural gas gathered from the North and South Rumaila
and Zubair fields is carried via pipeline to a 575-Mmcf/d natural gas
liquids (NGL) fractionation plant in Zubair and a 100-Mmcf/d processing
plant in Basra. At Khor al-Zubair, a 17.5-million-cubic-foot LPG storage
tank farm and loading terminals were added to the southern gas system in
1990. Natural gas also used to be pumped from Rumaila into northern Kuwait
via a 40-inch, 105-mile pipeline. The gas was used to supply Kuwaiti power
stations and LPG plants, but was halted following Iraq's invasion of
Kuwait in August 1990.
Iraq's only non-associated natural gas production is from the al-Anfal
field (200 Mmcf/d of output) in northern Iraq. Al-Anfal production, which
began in May 1990, is piped to the Jambur gas processing station near the
Kirkuk field, located 20 miles away. Al-Anfal's gas resources are
estimated at 4.5 Tcf, of which 1.8 Tcf is proven. In December 2001,
Russia's Gazprom reportedly was negotiating possible development of al-Anfal.
In November 2001, a large non-associated natural gas field reportedly was
discovered in the Akas region of western Iraq, near the border with Syria,
and containing an estimated 2.1 Tcf of natural gas reserves. It is not
clear whether or not the field is associated or non-associated.
Besides al-Anfal, Iraq has four large non-associated natural gas fields
(Chemchamal, Jaria Pika, Khashm al Ahmar, Mansuriya) located in Kirkuk and
Diyala provinces. In February 2000, Iraq's Oil Ministry named Agip and Gaz
de France as leaders on a $2.3 billion PSA (production sharing agreement)
project to develop these fields, which reportedly have total recoverable
reserves of more than 10 Tcf.
Currently, Iraq has a major natural gas pipeline with the capacity to
supply around 240 MMcf/d to Baghdad from the West Qurna field. The 48-inch
line was commissioned in November 1988, with phases II and III of the
project never completed due to war and sanctions. The last two phases of
the pipeline project were meant to supply Turkey. Iraq's Northern Gas
System, which came online in 1983, was damaged during the Gulf War as well
as by the Kurdish rebellion of March 1991. The system supplied LPG to
Baghdad and other Iraqi cities, as well as dry gas and sulphur to power
stations and industrial plants. Iraq also has a Southern Gas System, which
came online in 1985.more...
ELECTRIC POWER
Around 85%-90% of Iraq's national power grid (and 20 power stations) was
damaged or destroyed in the Gulf War. Existing generating capacity of
9,000 megawatts (MW) in December 1990 was reduced to only 340 MW by March
1991. In early 1991, transmission and distribution infrastructure also was
destroyed, including the 10 substations serving Baghdad and about 30% of
the country's 400-kilovolt (kV) transmission network. In early 1992, Iraq
stated that it had restarted 75% of the national grid, including the
1,320-MW Baiji and Mosul thermal plants as well as the Saddam Dam. In
1998, Iraq's maximum available electric generation capacity was estimated
(by Iraq) at around 4,000 MW, while the U.N. Iraq Program estimated in
November 2002 that generating capacity was 4,300-4,400 MW. The U.N. Iraq
Program further stated that, by the summer of 2004, Iraq's generating
capacity could reach 5,900 MW, with several power stations (Al-Quds, Beji,
Himreen,Yousfiya, Rumaila -- all gas-fired) under construction and several
others (Dibs, Hart, Najaf, Nassriya -- gas and thermal) awaiting approval
and/or funds.
According to a report by U.N. Secretary General Kofi Annan, Iraq's
power deficit stood at 1,800 MW as of August 2000, with blackouts a common
occurrence. Iraq reportedly has signed contracts for renovating two
generation units at the Harithah power plant, and another to rebuild the
Yusufiyah plant, which stopped operating in 1990. Iraq's Electricity
Authority reportedly also has signed several other contracts with Chinese,
Swiss, French, and Russian companies, to build 3,000 MW of additional
power generating capacity. These contracts require U.N. approval, and Iraq
has claimed that the United States and Britain are blocking $1.5 billion
worth of electrical equipment it has requested. In December 2000, it was
reported that a Chinese company had completed work on the Abdullah power
plant north of Baghdad. In October 2001, it was reported that Russia's
Mosenergomontazh was working to modernize Iraq's Southern Heat and Power
Plant in Najibia, Basra province. The project aims to add 200 MW of
generating capacity to Iraq's grid. In August 2002, the Najaf governate in
southern Iraq announced that two new power plants, with a combined
capacity of 20 MW, had come online.
more...
