IRAQ - Background Of Reserve Estimates.

Iraq's oil and gas reserves data have been grossly conservative, with many single well discoveries passed over by IPC (BP, Shell, Total, Exxon, Mobil & Partex). Gas finds were neglected and associated gas was flared. Oil ministry officials claimed in the 1990s IPC had deliberately kept reserves figures low in order for successive governments in Baghdad not to press for higher oil production levels and not to attract competitive E&P offers from other foreign companies.

Oil reserves were proven at 25 bn barrels in 1960, and 27 bn in 1961 when Law No. 80 reduced the concession area of IPC and its affiliates (Mosul Petroleum Co. & Basra Petroleum Co.) to the limits of their producing oilfields. Published data reduced reserves figures from 26.5 bn barrels in 1962 to 23.5 bn in 1968, when the Ba'th Party came to power. But Ba'thist governments in the 1970s and in most of the 1980s also were conservative in their reserves estimates.

Published figures of proven oil reserves stood at 35.9 bn barrels in 1972, when IPC was nationalised, and dropped to a 29-32 bn range through the rest of the 1970s. In 1980 they were reported at 31 bn barrels, falling to 30 bn in 1981-82, and rising from 41 bn in 1983 to about 48 bn barrels in 1987.

In 1988 Baghdad announced a new estimate of 100 bn barrels, based on re-evaluation of data and new discoveries made by the oil ministry's upstream companies. By then the entire petroleum sector had been restructured, with INOC abolished and its various divisions coming under the direct control of the oil ministry. In March 1995, when it held an international petroleum conference in Baghdad, the oil ministry said Iraq's proven oil reserves stood at 112.5 bn barrels.

Geologists at the oil ministry then said foreign firms to be involved in E&P will have to establish a minimum discovery ...