Iraq’s oil reserve could challenge top oil producers

Iraq looks set to shake up the Middle East’s oil hierarchy after the Iraqi Oil Ministry ended its second bidding round last week, awarding seven oilfields in a tender which could eventually increase the war-torn country’s capacity to 11 million barrels per day.

The auction, which centered on oilfields ready for development, saw Russian and Chinese oil firms secure lucrative contracts at the expense of companies from the United States who were largely absent from the tender for deals to tap Iraqi oil reserves, the world’s third-largest.

After suffering from decades of mismanagement, sanctions and war, it is forecasted that Iraq, by the decade’s end, could rival top producers Russia and fellow OPEC member Saudi Arabia.

“They have the oil in the ground,” said James Placke, a senior associate at Cambridge Energy Research Associates who specializes in the Middle East. “It’s getting it out that’s always been the problem.”

Iraq has the third largest proven oil reserve behind Saudi Arabia and Canada, and analysts believe there could be much more, once the country’s western desert is surveyed.

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