Shafaq News/ Iraq moves to search Hydrocarbon spots in a new marine zone located in the Gulf territorial waters. A first-of-its-kind step for the world's fifth-largest crude oil reserves.

Oil experts considered this decision "at high risk and economically useless," as the operation is costly and may not necessarily mean gas and oil are in this area.

Nabil Al-Marsoumi, an economic expert, said to Shafaq News Agency that "the Iraqi Ministry of Oil had previously offered 20% of the revenue of each barrel for the companies that would explore in this 400 km2 area, but no international companies had submitted."

"Offshore drilling is risky and expensive, as the marine rig costs about ten times the land rig; the equipment is transported by planes or ships, and the wells should be connected underwater, which needs building artificial islands and maintenance." Al-Marsoumi pointed out.

He revealed that "Iraq has many lands that have not yet been explored; in the western regions, it is expected to find about 100 billion barrels of crude oil," adding that "Iraq's production is controlled by the Organization of Petroleum Exporting Countries (OPEC +). Therefore, we must focus on extracting oil with a low cost but high revenues."

In turn, oil expert Hamza Al-Jawahiri explained to our Agency that "economically, hydrocarbon exploration is feasible in the area, as there is a sizeable disputed field between Iran and Kuwait, which is not developed, and this field is believed to extend to the Iraqi territorial waters."

"Iraq seeks to conclude a contract with the Chinese company (CINOOC) to make a study and establish its rights in this marine area." He said.

As part of the initial stage of offshore oil and gas exploration in southern Iraq, seismic investigations have been initiated by Iraq's Oil Exploration Company (OEC) and China National Offshore Oil Corporation (CNOOC).

The Chinese exploration company has begun a joint research contract for two-dimensional seismic and geophysical surveys to examine hydrocarbon gathers in the Iraqi offshores north of the Arabian Gulf near Basra Governorate.

According to Al-Jawahiri, until now, there is not enough information about this marine area, as it is located within the regional waters where there are deep ports, including the port of Al-Amaya and Khor Al-Basra, as well as five buoys, and an entrance to Umm Qasr and Shatt Al-Arab for ships.

"It is a small area, and it is difficult to develop and produce oil or gas fields in this region." He said.

In contrast, the former Iraqi Oil Minister, Ihsan Abdul-Jabbar Ismail, confirmed that the exploratory studies concluded that this region contains hydrocarbon compounds.

According to the EIA, Iraq (Federal Iraq and Kurdistan Regional Government) is the second-largest crude oil producer in OPEC after Saudi Arabia. It holds the world's fifth-largest proved crude oil reserves, at 145 billion barrels, representing 17% of proved reserves in the Middle East and 8% of global reserves.1 Most of Iraq's major known fields—all of which are located onshore—are producing or are in development.2

Iraq's crude oil production grew by 1.7 million barrels per day (b/d) from 2013 through 2019, and it averaged 4.7 million b/d in 2019, an all-time high over a year. However, in 2020, Iraq's crude oil output fell to less than 4.1 million b/d.