current affairs energy peak oil politics

How much oil? Iraq revises its reserves

This week Iraq announced a revision to its stated oil reserves, revising them upwards by 24% to 143.1 billion barrels. This would make them the world’s third largest source of oil, overtaking their old rival Iran. On this basis, Iraq now claims it can push its production from the current levels of 2.4 million barrels a day to a grand 12 million.

“Oh well, another setback for peak oil theorists,” says Phil Flynn, who calls it “an amazing development”.

Hmm. Perhaps he is unaware of OPEC’s habit of overstating reserves, or of why Iraq might want to make such a statement. Although they were a founding member of OPEC, Iraq’s role in the cartel has dwindled as its oil production collapsed during the war. They expect to return to OPEC’s quota system in a couple of years’ time, and to get their ravaged oil industry back on track they need to attract foreign investment. What better way than to make a big claim of untapped riches, especially if you get to trump Iran in the process?

Other experts agree. “I don’t think it’s possible accurately and confidently to look at the reserves for many Middle Eastern countries with a great deal of confidence” says natural resource analyst Paul Harris. “If one was cynical, one would say the restatement of reserves was designed to whet the appetite of potential investors.”

Former Iraqi oil minister, Issam al-Chalabi, also questions the figures. “Iraq hasn’t carried out any new seismic surveys and hasn’t drilled any new exploration wells for years in order to announce new reserves,” he points out.

In other words, this is an entirely political claim – how could Iraq possibly have found more oil if they weren’t even looking? Like every other OPEC country, Iraq’s oil reserves are apparently bottomless, their reserves convenient political fictions.

We just don’t know how much oil we actually have. The only thing we can say for certain is that it suits everyone to say we have plenty.

4 comments

  1. It is entirely unclear to me why rising a reserve estimate (which is, exactly, based upon what?) would be a setback to “peak oil theorists”. Peak oil is a theory based upon our scientific understanding of oil formation and oil reserves. It completely conforms with mainstream petroleum geology. If it would indeed turn out that some reserves were underestimated, this would only have a certain impact on the peak oil timeline, while the development itself would – and will – remain unaffected. Besides that, it is a well established fact, that some reserves have been overestimated – both deliberately and by error. The logics of the finance sector always calls for an overestimation of your asset values – there is no difference in principle between the US housing sector and the global oil market.

    1. Indeed, it’s a thoroughly ill-informed comment on peak oil, which would be unaffected as a geological principle even if Iraq’s new reserves were real.

  2. Hello Jeremy.

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    Today’s New World Alchemy: Transform plastic back into oil and reduce CO2 carbon footprint by 80%.

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