Iraq Raises Estimate Of Oil Reserves
MARY LOUISE KELLY, host:
Sticking with Iraq but turning to oil news now. And word from Baghdad today that Iraq may have a lot more oil than previously thought, specifically Iraq's oil minister has raised the estimate of the country's proven crude oil reserves by a quarter, to more than 143 billion barrels. If true, that would mean Iraq has the second largest crude oil reserves in the world, second only to Saudi Arabia.
Well, for some perspective on that, we're joined now by Ben Lando. He's Iraq bureau chief of the Iraq Oil Report, an online news site. And, Ben Lando, potentially how big a deal is this if Iraq does in fact have a quarter more oil than had been previously thought?
Mr. BEN LANDO (Founder and Iraq Bureau Chief, Iraq Oil Report): Well, they already had the world's third largest proven oil reserves, so there's not too much higher that you can get. But this does open up - kind of increases the opportunity for foreign investors. It increases the opportunity for Iraq to raise the revenues that they need to fund their reconstruction. It kind of further solidifies the growth that you've seen in Iraq since 2003 in terms of modernizing their oil sector.
KELLY: Well - and I gather that this new estimate comes in part from studies by Iraq's oil ministry but also in part by some of these international companies that the country has signed contracts with already and obviously would like to sign more of. I mean, is it cynical to ask, these companies would seem to have an interest in seeing this number to be bigger, wouldn't they?
Mr. LANDO: Sure. That means it helps them when they're looking to their board of directors or those that make the policy for the oil companies that they're investing in even larger oil fields than they originally thought. It wouldn't be too cynical. It's just the fact that the more that these companies and the ministry learn about these fields, the more reserves likely they're going to find. And this is not going to be the last of such statements.
KELLY: Of course having 143 billion barrels is a very different thing from actually being able to produce and export that oil. What are the challenges that lie ahead?
(Soundbite of laughter)
Mr. LANDO: Well, many challenges, both above ground and below ground. I mean, some of these oil fields have been worked over a lot during Saddam's time and Saddam Hussein's regime, and these fields need to be fixed. They need to assess any damage that was done by this kind of overworking of the fields and putting new technology into the fields to see how much they actually can produce.
Then above ground, setting aside the security risks, setting aside the political risks, you're looking at new infrastructure at the projects itself, so they can actually produce the oil, new pipelines to get it to where it needs to go to, refineries, increasing the size, the technology of the refineries that they're going to keep the oil in the country, fixing first and also increasing the size of the export outlets so that the oil can leave the country. I mean, these are all not only monumental tasks but they're tens of billions of dollars, and that's probably a conservative number.
KELLY: Ben Lando, a big picture, does an announcement like this revise estimates? Does it raise questions about how much oil there may be out there in the world that we didn't know was out there?
Mr. LANDO: That's a difficult question. As the technology increases, then the companies, the industry is able to find more oil and gas reserves, and they're able to produce oil and gas from reserves that they thought they weren't able to before without this new technology.
What people will usually say is that the low-hanging fruit is gone, except for in Iraq. Iraq is the last place where there's a country with massive untapped and even undiscovered oil and gas reserves. Iraq is a place for the oil sector right now, and everything else kind of pales in comparison.
KELLY: All right, thanks a lot.
Mr. LANDO: Any time.
KELLY: That's Ben Lando of the online news site Iraq Oil Report. He joined us via Skype from Iraq to update us on the news today that Iraq has raised its estimate of proven national crude oil reserves by almost 25 percent.