Iraq Resumes oil exploration after 20 year break  

The SMH reports that Iraq has restarted oil exploration. My prediction is that they will find quite a lot of oil - Iraq resumes oil exploration after 20-year break.

Iraq said today it was resuming exploration of its immense oil reserves after a break of nearly 20 years due to crippling UN sanctions, saying it hopes to double its proven deposits of crude. "Today the Iraqi oil ministry celebrates a return to work by Iraqi oil exploration teams after 20 years of interruption," ministry spokesman Assim Jihad told AFP. Oil Minister Hussein al-Shahristani attended a ceremony to mark the event at the Al-Garraf field near Nasiriyah, 350 km south of Baghdad. Jihad said the ministry would deploy three exploration teams trained abroad in the latest techniques.

OPEC member Iraq hopes the exploration squads will uncover deposits that will enable it to double its proven oil reserves, currently at 115 billion barrels of crude. "The ministry has begun to build new refineries in the country, in the provinces of Dhiqar, Kirkuk, Karbala and Misan while renovating other refineries in Baghdad, Basra and Diwaniyah," said Shahristani. In the province of Dhiqar alone the oil ministry hopes to draw on reserves estimated at four billion barrels of crude.

The SMH also reports that the Chinese are interested in buying this oil - Iraq and China revisit major oil deal.

Iraq's oil ministry said Sunday it plans to resurrect a major oil deal with China that fell apart amid crippling United Nations sanctions and the aftermath of the 2003 US-led invasion. Oil minister Hussein Al-Shahristani met with Chinese ambassador Chang Yi to revive the 1997 contract that granted China exploration rights to the Al-Ahdab oil field in the province of Wassit, just south of Baghdad. "Iraq and China are concerned with completing the agreement to develop Ahdab oil field," a statement from the Iraqi oil ministry said on Sunday.

The construction of a power station in the province's Al-Najibia was also discussed, Assim Jihad, a spokesman for the ministry told AFP, adding that an Iraqi delegation would travel to China in the next few days to work on the terms. After China won exploration rights to the al-Ahdab field in 1997, in a deal then valued at $US700 million ($A773.4 million) over 23 years, activities were suspended due to UN sanctions and postwar security problems.

Planned oil production was 90,000 barrels per day. State-run China National Petroleum Corp had been expected to win the new exploration rights. The meeting in Baghdad came after Iraq announced on Friday that it was resuming exploration of its immense oil reserves after a break of nearly 20 years. Iraq wants to ramp up output by 500,000 barrels per day (bpd) from the current average production of 2.5 million bpd, about equal to the amount being pumped before the US-led invasion of March 2003.

Another SMH report says that Nigerian oil reserves are also increasing - Nigeria's oil reserves hit 33.6 bln barrels.

Crude oil reserves in Nigeria, the world's eighth largest exporter, have increased by 12 percent over the past year to 33.6 billion barrels, a top oil official said Friday. "As at today, we have an oil reserve base of 33.6 billion barrels," Abubakar Yar'Adua chief of the state-run oil company, Nigerian National Petroleum Corporation (NNPC) told reporters.

The reserves in the OPEC member state stood at 30 billion barrels a year ago. Nigeria, until recently Africa's leading oil producer and exporter before it was overtaken by Angola, is aiming to build a reserve base of 40 billion barrels by 2010.

The SMH also has a report from Paul McGeogh on the disastrous Georgian offensive in South Ossetia - Trigger happy and oil mad.

Dig deep enough and you come to oil and gas. The war this week between Russia and the headstrong former Soviet republic of Georgia prompted hand-wringing about another awkward demonstration of the limits of American power. But what sounded like a stiff breeze in the capitals of Europe was a collective sigh of relief as leaders recalled their own good sense in resisting an American push back in April for the North Atlantic Treaty Organisation to clasp Georgia to its ample bosom.

Were Georgia a member of NATO, as are more than half a dozen other former Soviet republics and satellites, the US and Canada and their 24 European allies now would be, technically at least, at war with Russia. In the NATO charter, a strike at one is a strike at all.

Put to one side European squeamishness about war. In Afghanistan the German, Italian, French and Spanish contingents refuse to actually fight. But much of the gas that heats their homes, the oil that fuels their factories and the petrol that drives their cars are delivered through a spaghetti-like tangle of pipelines controlled by Moscow.

All, that is, except the one that Washington sponsored. Running through Georgia, it was seen by the US as a way to undermine Russian power in what was one of Moscow's key spheres of influence in the old Soviet days.

I haven't bothered reading whatever nonsense the neoconservative press has babbling away about this event, but I thought this Moscow Times article is worth reading - when you look at propaganda from the other side of the fence the structure is much easier to observe, watching a parade of tame thinktankologists all vigourously spouting the party line - War Casts Cloud Over Pipeline Route. They seem to be quite keen on blocking the long awaiting Nabucco pipeline development (though personally I reckon that one will end up carrying Iraqi gas to Europe one day).

Any plans to use Georgia as a bridge for more energy supplies to Europe are likely set to gather dust now that the tiny country's fierce armed conflict with Russia has exposed the insecurity of the route, analysts said.

Georgia has been a key conduit of oil and gas from Central Asia to the West that bypasses Russia, and Europe has been hoping to build another pipeline to bring more gas from the area. That pipeline project, called Nabucco, has long been on the drawing board, but potential investors had trouble contracting enough gas for it from Azerbaijan or Turkmenistan.

Shipping the gas from Turkmenistan would require building a separate pipeline across the Caspian Sea bed, which has yet to be divided by the sea's five littoral states, Russia, Azerbaijan, Kazakhstan, Turkmenistan and Iran.

Now, Georgia's vulnerability may have dealt a lethal blow to Nabucco and plans for a trans-Caspian pipeline. "A trans-Caspian gas pipeline can be considered a forever buried chimera," said Pavel Baev, an energy expert at the International Peace Research Institute in Oslo. "It became clear for all the participants of these energy games that nothing will go through the Caspian Sea."

Europe was "shocked" by the instability and realized that "hardly anyone would invest money in new projects" associated with Georgia, said Konstantin Simonov, director of the Fund for National Energy Security.

When asked about the impact of the war on Nabucco prospects, European Commission energy spokesman, Martin Selmayr, said none of the pipelines going through Georgia was affected. The commission was in regular contact with energy companies in the region, he said.

Russian air strikes did not hit any of the three international oil and gas pipelines crossing the country or any oil ports, but they forced BP, which is an operator of Azerbaijan's two biggest energy projects, to stop oil and gas shipments through Georgia as a precautionary measure Tuesday.

The BP-operated Baku-Tbilisi-Ceyhan pipeline, which carries oil from Azerbaijan to the Turkish Mediterranean, was already out of commission because of an explosion in Turkey last week that Kurdish separatists claimed responsibility for.