It is thought there nay be a "supergiant" oilfield underneath Baghdad, which may hold 8.1 billion barrels of oil, and is one of ten oilfields and one gasfield that seems about to come onto the market. To place this into perspective, the entire North Sea reserves are around 4 billion barrels, or half of that; while on the world stage of oil demand it is enough for about three months. Nonetheless, at a current $80 a barrel, the find would be worth around $648 billion, and more as the price of oil will inevitably rise in perpetuity.
Three days ago, BP and its Chinese partner, CNPC, signed the first formal big oil deal since the U.S.-led invasion of 2003. BP has considerable experience of the geology of the region, dating back to its discovery of the Rumaila field in 1953, and between them the two partner companies could invest $15 billion.
Not surprisingly, there is strong interest from various companies, including Japan Petroleum Exploration Company (Japex), who have predicetd that it could produce a daily 400,000 barrels (10% of Japanese demand for oil) when fully exploited, and well above its current output of 17,000 bpd. However, other companies are very reluctant to invest there, so close to Baghdad, in view of the political instability that prevails in a city that has suffered greatly since the war began - for whatever reasons it did.
It is thought that if foreign investment can be garnered both here and for fields in the more stable north of the country, the output of Iraqi oil could be brought up from the present 2.5 million bpd to 7 million bpd within seven years, or encroaching on present output from Saudi Arabia of around 10 million bpd. It looks then that Iraq will become a key player in the future oil game and maybe that's what the war was really about rather than toppling a brutal dictator or intercepting the infamous weapons of mass destruction (WMDs), which were never found.
Related Reading.
"Baghdad's vast oilfield presents dilemma to would-be bidders," by Robin Pagnamenta. http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article6901701.ece
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