Don’t forget the oil: the payoff is huge


Richard Moore

Delivered-To: •••@••.•••
From: "Nurev Ind" <•••@••.•••>
To: "n u rev" <•••@••.•••>
Subject: West sees glittering prizes ahead in giant oilfields
Date: Wed, 6 Aug 2008 11:43:10 -0400  [!! - rkm]

July 11, 2002

West sees glittering prizes ahead in giant oilfields By
Michael Theodoulou in Nicosia and Roland Watson

THE removal of President Saddam Hussein would open
Iraqs rich new oilfields to Western bidders and bring
the prospect of lessening dependence on Saudi oil.

No other country offers such untapped oilfields whose
exploitation could lessen tensions over the Western
presence in Saudi Arabia.

After Kuwait's liberation by US-led forces in 1991,
America monopolised the postwar deals, but the need to
win international support for an invasion is unlikely
to see a repeat.

Russia, in particular, and France and China all
permanent members of the United Nations Security
Council have high hopes of prising promises of
contracts in a liberated Iraq from a United States that
may need their political support.

President Bush has used the War on Terror to press his
case for drilling in a protected Arctic refuge, but
predicted reserves in Alaska are dwarfed by the
oilwells of the Gulf. Anthony Cordesman, of the Centre
for Strategic and International Studies in Washington,
said that the issue for the US was as much the security
of the Gulf as access to particular oilfields.

"You are looking down the line to a world in 2020 when
reliance on Gulf oil will have more than doubled. The
security of the Gulf is an absolutely critical issue."

Gerald Butt, Gulf editor of the Middle East Economic
Survey, said: "The removal of Saddam is, in effect, the
removal of the last threat to the free flow of oil from
the Gulf as a whole."

Iraq has oil reserves of 112 billion barrels, second
only to Saudi Arabia, which has some 265 billion
barrels. Iraqi reserves are seven times those of the
combined UK and Norwegian sectors of the North Sea. But
the prize for oil companies could be even greater. Iraq
estimates that its eventual reserves could be as high
as 22 0billion barrels.

Three giant southern fields - Majnoon, West Qurna and
Nahr Umar have the capacity to produce as much as
Kuwait. The first two could each equal Qatar's
production of 700,000 barrels a day. "There is nothing
like it anywhere else in the world. Its the big prize,"
Mr Butt said.

Extraction costs in these giant onshore fields, where
development has been held up by more than two decades
of war and sanctions, would also be among the lowest in
the world. Provided that the US can ensure stability in
a post-Saddam Iraq, it would take five years, at most,
to develop the oilfields and Iraqs prewar capacity of
three million barrels a day could reach seven or eight
million, industry experts said.

However, regime change in Baghdad will be of little
value to international oil companies unless it is
followed by a stable Iraq with a strong central
government. Companies can't go in unless there is
peace. To develop Majnoon, you need two to three
billion dollars and you dont invest that kind of money
without stability, one industry analyst said. [Notice
that democracy is irrelevant - only 'strong central
government' matters - rkm ]


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