Iraq may have twice as much oil as previously thought, says minister

Jabar Al-Luaibi said Iraq’s oil reserves may be double their current estimated level. (REUTERS)
Updated 29 March 2018
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Iraq may have twice as much oil as previously thought, says minister

LONDON: Iraq’s oil reserves may be double their current estimated level, according to the country’s oil minister, as OPEC’s second-largest producer invited tenders for the exploration of 11 oil and gas blocks in the country’s south and east.
Jabar Al-Luaibi made the prediction at an energy conference in Baghdad on Wednesday, Reuters reported, with his comments subsequently echoed by Adnan Al-Janabi, head of the Iraqi parliament’s oil and gas commission.
The doubling of the country’s proven reserves would see Iraq overtake Saudi Arabia to contend with Venezuela for the title of the country with the largest proven reserves.
The South American nation says it has just over 300 billion barrels worth of proven reserves, a claim met with skepticism by some market analysts, with much of its reserves consisting of hard-to-access heavy oil in the country’s Orinoco belt.
Iraq last year upgraded its reserve estimates to 153 billion barrels from their previous level of 143 billion.
The oil minister’s statement is more likely to relate to future possible increases in resources, rather than an immediate upgrade to current reserves, said Robin Mills, CEO of UAE-based Qamar Energy.
“I don’t think it has any impact on the short- or medium-term output from Iraq, but it does emphasize the tension between OPEC restraint and Iraq’s plans for production growth,” he said.
The country plans to boost crude production to more than 5 million barrels per day from the current level of 4.35 billion.
However Al-Luaibi insisted that it “definitely will not deviate from the overall decision of OPEC” when it comes to the possible extension of a deal between OPEC and other producers to cut production, due to expire at the end of the year, Reuters reported.
Speaking at the same event, OPEC Secretary-General Moham-med Barkindo told the conference that the bloc was seeking “very long-term” cooperation with non-OPEC producers.
His remarks follow comments earlier this week by Saudi Arabia’s Crown Prince Mohammed bin Salman that the Kingdom is in discussions with Russia to forge an unprecedented 10-20 year cooperation agreement, building on the success of 2016’s agreement between OPEC and non-OPEC producers to cut output to support oil prices.
Brent crude futures, which slumped below $30 a barrel in early 2016, have recovered as a result of the production cut agreement, trading at about $70 a barrel this week.
Barkindo told conference delegates in Baghdad that OPEC was evaluating the impact of the deal to determine the “appropriate action” when it expired at the end of this year.
“In addition to the 24 countries that came to sign the declaration of cooperation in November, we have six more producing countries who came to show solidarity,” he said.
Al-Luaibi said that several oil exporters have suggested a six-month extension to the deal, declining to name them.
Barkindo said that investment in the industry was increasing following the recovery in prices, but had yet to reach levels witnessed before prices began falling in late 2014.


Thomas Cook warns on profit as hot summer hits demand

Updated 6 min 31 sec ago
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Thomas Cook warns on profit as hot summer hits demand

  • Thomas Cook makes all its profit in the summer when its customers in northern Europe go on holiday
  • But ‘unprecedented months of hot weather’ reduced demand for late bookings

LONDON: British travel company Thomas Cook cut its 2018 profit outlook by about 13 percent, blaming a heatwave in northern Europe for more discounting and tougher competition in the most profitable later part of the summer holiday season.
Thomas Cook makes all its profit in the summer when its customers in northern Europe, including Britain, Germany and Scandinavia go on holiday, mainly to warmer destinations in southern Europe such as Spain, Turkey and Greece.
But what the company described as “unprecedented months of hot weather” reduced demand for late bookings, adding to pressure after it had already warned in July that profit would be at the lower end of expectations.
“The slowdown in customer bookings during June and July extended into August, leading to higher than normal levels of promotional activity,” Thomas Cook said in a statement on Monday.
Thomas Cook’s bigger rival TUI Group in August stuck to its forecasts but said that the heatwave would prevent it from beating them.
For the 12 months to Sept. 30 2018, Thomas Cook guided that underlying operating profit (EBIT) would come in at around £280 million ($366 million), below a previous £323 million to £355 million range.
The company also said the hot summer was affecting demand for winter holidays, saying that it would provide more detailed guidance in November when it reports its annual results.
In a separate statement, Thomas Cook said its chief financial officer Bill Scott would leave the company on November 30, and be replaced on an interim basis by Sten Daugaard, a board member of Thomas Cook’s German business.
A search for a permanent successor would be started immediately, the company added.