London: Iraq's promising oilfields can be tapped for less than $2 a barrel and could double the nation's output to 4 million barrels a day in five years provided security improves, IHS consultancy said.
The company's Iraq Atlas, to be released on May 9, pegs Iraq's oil reserves at 116 billion barrels, in line with industry estimates, and says there could be a further 100 billion barrels lying beneath its western desert.
"Iraq's reserves are clearly phenomenal. Once the infrastructure is in place, the oil will come out of the ground quite cheaply," said Ron Mobed, president and chief operating officer of IHS.
Baghdad reckons up to $25 billion must be spent on the country's infrastructure, which is collapsing after more than a decade of sanctions under Saddam Hussain and four years of violence after the US-led invasion.
Oil law awaited
This sum would be essential to reach and help exceed the four million bpd target.
Mobed said those estimates may prove conservative if capital costs continue to spiral and that security in Iraq would need to improve for capacity to expand.
Access to Iraqi reserves, the world's third biggest, is sought keenly by major oil firms, but they await ratification of Iraq's oil law. The legislation will be presented to parliament next week, though the Kurdish region rejects some elements of it.
"Iraq is moving very rapidly towards an encouragement of foreign investment - especially compared to other huge reserve holders in the region where access is essentially nil," said Mobed.
Oil production in Iraq is stuck at around two million barrels per day (bpd), well down on the nearly three million bpd hit in the final days of Saddam and even further from the 3.7 million bpd pumped in 1979, prior to the Iran-Iraq war.
But Mobed was confident that flows would ramp up quickly once investment was made.
"Doubling Iraq's production capacity in the next five years doesn't feel like a stretch. It's just a matter of opening up what's been shut in and bringing on improvements to the remainder."
IHS says the country's production in the mid-term could reach six million bpd.
Mohammad Zine, IHS regional manager for the Middle East, said sanctions and wars had taken their toll on Iraq's workhorse oilfields - Kirkuk in the north and Rumaila in the south.
"There is some damage, but it's not irreparable," he said.
Kirkuk has the ability to produce more than 600,000 bpd but is pumping only 350,000 bpd, while the Rumaila oilfields could crank out at least 1 million bpd, he said.
Most of Iraq's proven oil reserves are in the Shi'ite south and the Kurdish north. That has left Sunni Arabs in central and western Iraq fearful that autonomous deals by those regions would cut them out of Iraq's oil wealth.
But Zine said the centre of the country also held prized oilfields such as East Baghdad.
Mid-term output could reach 6m bpd
The company's Iraq Atlas, to be released on May 9, says there could be a further 100 billion barrels lying beneath its western desert.- IHS says the country's production in the mid-term could reach six million barrels per day.- Kirkuk has the ability to produce more than 600,000 bpd but is pumping only 350,000 bpd, while the Rumaila oilfields could crank out at least one million bpd.