Iraq's First Oil Reserves Report In A Decade

According to a recent WSJ article, Iraq has released its first report on it's oil reserves since 2001.  This report raises the estimate more than 24%, placing them as the number three reserve holder in the world (WSJ).  The number went from 115 billion barrels to 143.  However, this report raises many questions as to its legitimacy and purpose.  Some feel that the oil minister has inflated this number without having actual evidence to back it up.  These skeptics claim that they haven't had the time or resources to fully conduct surveys that would provide accurate numbers.  Another concern is that they put out such a high number to boost national confidence in the still unstable Iraqi government.  Despite these concerns, many international oil firms have made the investment in Iraq. These companies include BP, Exxon, Shell, and Lukoil (WSJ).  One of the main things that challenges this operation is that the country has been war-torn for the past decade and it's infrastructure is severely damaged.  However, the government has high hopes that with these international deals, it can boost it's output from 2.4 million barrels a day to 12 (WSJ).  It surely has the reserves for this but not the infrastructure, yet.  Regardless of all these obstacles, most feel that within a couple years the country can have this industry back in full swing, given new technologies and production techniques.

This will have a huge impact on the energy industry.  With this country having been a war zone for the past nine years,  it hasn't been able to produce on a level to compete with the world.  Now that the war is ending, many new opportunities are arising.  Not only is this an excellent way for them to rebuild their country, it is an excellent way for the investing companies to gain large profits and greatly expand their businesses.  The fact that these oil figures are questionable does not seem to be stopping giants like Shell and Exxon from getting involved.  Currently they are conducting research of their own and regardless of whether or not these numbers are inflated, there is money to be made on oil in Iraq. One fact that isn't questionable is that they have reserves greater than most countries in the world, so it will be a safe bet.  I am hoping that they truly use this opportunity to their advantage and use the profits to rebuild their country.  However this plays out, it is a huge sector of the oil industry that is being renovated here and it will doubtlessly have a severe impact on the energy industry.

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