Even more so than Iran, Iraq remains the greatest relatively underdeveloped oil (and gas) frontier in the Middle East. It is little wonder, then, that it has been and remains the focus of an ongoing power struggle between the U.S. and its allies on the one side and China and Russia (via Iran) on the other. In all of these central Middle Eastern tussles, especially involving Iraq and Iran, France has liked to see itself in the role of the ‘honest broker’, not especially aligned to either side, as was notably demonstrated by its attempts to stop the U.S. invasion of Iraq in 2003 and then to stop the U.S. from unilaterally withdrawing from the Joint Comprehensive Plan of Action (‘nuclear deal’) with Iran in 2018. Given this, it is not surprising that France’s flagship energy company, TotalEnergies, has secured a massive deal with Iraq to advance four major projects across the country, all linked to its huge oil and gas resources.
In broad terms, the prize for France is exceptional. Officially, Iraq holds a very conservatively estimated 145 billion barrels of proved crude oil reserves (17 percent of the Middle East’s total, around 8 percent of the globe’s, and the fifth-biggest on the planet), plus nearly 132 trillion cubic feet of natural gas (the 12th largest in the world), according to figures from the Energy Information Administration (EIA). Unofficially, the figures are likely to be much higher.
Iraq’s Oil Ministry has stated a number of times that the country’s undiscovered resources amount to around 215 billion barrels and this was also a figure that had been arrived at in a 1997 detailed study by respected oil and gas firm, Petrolog. Even this figure, though, did not include the parts of northern Iraq in the semi-autonomous region of Kurdistan, administered by the KRG. Prior to the recent rise in exploration activity in the KRG area, more than half of the exploratory wells in Iraq had been drilled prior to 1962, a time when technical limits and a low oil price gave a much tighter definition of a commercially successful well than would be the case today. Based on the previous limited exploration and development of oil fields in the KRG area, the proven oil reserves figure was first put at around 4 billion barrels. This has been subsequently upgraded by the KRG to around 45 billion barrels but, again, this may well be a very conservative estimate.
The key logistical problem in the south of Iraq that has precluded an advance in crude oil production to its 7 million barrels per day short-term target or to the longer-range targets of 9 million bpd and even 12 million bpd is the completion of the Common Seawater Supply Project (CSSP), and this is one of the four projects now taken over by TotalEnergies. The project involves taking and treating seawater from the Persian Gulf and then transporting it via pipelines to oil production facilities for the purposes of maintaining pressure in oil reservoirs to optimize the longevity and output of fields. The long-delayed plan for the CSSP is that it is used initially to supply around 6 million bpd of water to at least five southern Basra fields and one in Maysan Province, and then built out for use in further fields.
Both the longstanding stalwart fields of Kirkuk and Rumaila – the former beginning production in the 1920s and the latter in the 1950s, with both having produced around 80 percent of Iraq’s cumulative oil production – require major ongoing water injection, with reservoir pressure at the former having dropped significantly after output of only around 5 percent of the oil in place (OIP). Rumaila, in the meantime, had produced more than 25 percent of its OIP before water injection was required because its main reservoir formation (at least its southern part) connects to a very large natural aquifer which has helped to push the oil out of the reservoir.