BAGHDAD: Iraq’s oil ministry is raising its estimate for the country’s proven oil reserves to 150 billion barrels, up nearly 5 percent from a 2010 estimate of 143 billion barrels.
Oil Ministry spokesman Assem Jihad said the higher figures are the result of increased work in the oil sector over the past two years.
Jihad, quoted by The Associated Press, said the estimate does not include the self-ruled Kurdish region.
Kurdish officials claim their region contains 45 billion barrels, although the figure cannot be confirmed independently.
Iraq is OPEC’s second largest oil producer after Saudi Arabia.
Oil revenues make up nearly 95 percent of the country’s budget.
In a recent Reuters interview, former BP boss Tony Hayward said he expects a breakthrough soon for his new charge Genel Energy in the impasse over Iraqi Kurdistan oil exports and is adjusting to life at the helm of a smaller but more responsive company.
A keen sailor who raised hackles during the 2010 Gulf of Mexico spill when photographed on a boat as oil continued to spew into the sea, Hayward invoked his hobby to describe the difference between his old and new jobs. Leading BP was similar to being the captain of a supertanker, he said.
“You can put the helm hard to port and it takes a very long time to see any consequences of having done that. This (his role at Genel) is a bit more like sailing a yacht, helm to lee, and the boat moves,” CEO Hayward said.
Once dominated by smaller companies such as Genel, Kurdistan has since become the playground of big oil as Exxon Mobil was followed by Total, Chevron and Gazprom, who all risked Baghdad’s ire by venturing north.
But oil exports and contracts are still at the heart of a dispute between Baghdad’s Arab-led government and Kurdistan over territory, oilfields and political autonomy.
Illustrating the growing lure for oil companies of Kurdistan, historically an under-explored region, Genel said recently it found a “significant” oil field at its Chia Surkh well.
Kurdistan, with its huge onshore fields of easy and cheap to extract oil, dubbed by Hayward “the last great conventional oil onshore frontier,” compares favorably to the world’s other remaining oil frontiers — ever-deeper water, Arctic regions and shale resources outside the US.
Hayward and a group of business partners own a 6.7 percent stake in the company and he also has a personal stake of around 0.6 percent.
“There aren’t many opportunities left, frankly, so I suspect those (oil majors) who aren’t there (in Kurdistan) will find it difficult to take a big position,” said Hayward, who bought into Genel after stepping down as BP chief executive in the wake of the Gulf of Mexico oil spill.
His alma-mater and Royal Dutch Shell are both conspicuous by their absence in Kurdistan, where the contracts for companies are seen as more lucrative than those offered by Iraq.
“We’re approached by lots of people all the time, big and small, some wishing to buy, some wishing to sell,” Hayward said, adding that the company was comfortable with its current position.
“There may well come a time when we can create more value by letting others take them (Genel’s assets) on, but we’re not at that position at the moment.”
While the prize in Kurdistan is huge — Hayward said he now believed a 300 million barrel estimate made three years ago for the Chia Surkh field was conservative — the political risks associated with exporting the oil remain.
Kurdistan crude used to be shipped to world markets through a Baghdad-controlled pipeline to Turkey, but exports via that channel dried up last year as a result of a row over payments. Iraq views any continuing Kurdistan exports as illegal.
Genel currently exports around 25,000 barrels of oil per day from its Taq Taq field by truck to Turkey, a route which Hayward says could carry up to 50,000 barrels of oil per day in the future.
Kurdistan is also building its own oil pipeline to Turkey, and despite Baghdad’s objections, Hayward believes the momentum for exports is gathering pace.
“I do think between now and the end of the year, we’ll see a very significant step forward in terms of Kurdistan exports entering the global oil market,” he said.
