April 20, 2007

Iraq may have untapped oil reserves of over 100 billion barrels on top of a known reserve base of 116 billion barrels, making Iraq the world's potential top oil producer, says an IHS Inc. report. According to IHS's rankings, Iraq ranks third in known oil reserves, behind Saudi Arabia and Iran.

The consulting firm in a comprehensive report released Wednesday said the untapped oil reserves mainly lie in the western part of the country. 

Describing the oil reserves a "gold star opportunity," president and chief operating officer of

IHS Ron Mobed told reporters the security situations need to improve drastically to let the country exploit the potential. "Obviously the security side is a big question," Mobed remarked.

According to the IHS report Iraq's two main oilfields, at Kirkuk in the north of the country and Rumaila in the south, were operating below capacity due to damage caused by the war and previous sanction regimes.

Iraqi's highest oil production was in 1979 at an average of 3 million barrels a day. The country could not realize its target of pumping 3.5 million barrels a day set back in mid-2006. So now the daily output stands at two million barrels per day, down from three million barrels in early 2003. "It could rise to four million barrels by 2012 if the conflict subsides and new investments in oil infrastructure are made," the IHS report said. It also said the output could be raised to six million barrels in the future.

IHS said its experts conducted a field-by-field analysis of Iraqi oil prospects and the finding would be released next month in full detail.