Global Policy Forum

Oil production in a post-war Iraq is likely to rival that of OPEC heavyweight Saudi Arabia within nine years as its output almost triples because of financial needs and huge crude reserves, a report suggested Wednesday. If the Iraqi regime is toppled the country's production capacity is expected to soar from a current level of 2.8 million barrels per day (bpd) to 8.0 million over nine years, the Centre for Global Energy Studies (CGES) said.

"In view of Iraq's gargantuan future financial needs and its sole dependence on oil for foreign exchange... Iraq will adopt a policy of accelerated oil development and production following a change of regime," the energy consultancy said in its Global Oil Report. This would see it boost production to pre-Gulf War levels of about 3.5 million bpd within two to three years at a cost of about five billion dollars (4.5 billion euros) to improve neglected oil fields.

"At the same time, Iraq will develop an additional oil production capacity of around 4.5 million bpd by tapping its undeveloped reserves with the help of international oil companies at a cost of around 30 billion dollars over a nine-year time span," the report said.

The consultancy, founded by former Saudi Arabian oil minister Sheikh Ahmad Zaki Yamani, estimates that Iraq's proven oil reserves of 112.5 billion barrels are "but a fraction" of its probable reserves.

A good indication of this is the Iraqi National Oil Company's short spell of exploration activity during 1971-80 which added 45 billion barrels to Iraq's proven reserves, it said. An output surge of the size predicted in the report would see Iraq competing with Saudi Arabia for the place of the biggest Gulf producer if Iraq pumped its full capacity.

Saudi Arabia, the largest producer within the Organisation of Petroleum Exporting Countries (OPEC), says it has a capacity of 10.5 million bpd and is now pumping about 8.0 million bpd.