Basra, oil wealth of Iraq

Basra, oil wealth of Iraq

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Basra is the third largest city in the Republic of Iraq, the economic capital of Iraq, and its first water outlet.
Basra is located at the southernmost point on the West Bank of Shatt al-Arab. It has a population of 2,796,000 and an area of 19,070 km2, the administrative and political center of Basra Governorate. It is characterized by the size of the oil and gas wealth it owns , and on which the headquarter of the south oil Company is located and it exports most of its production from the Basra oil station .

Basra is an economic capital:
Oil is the main source of the Iraqi economy, and Iraq has the fourth largest oil reserves in the world, which is estimated at 115 billion barrels, and Basra has the largest oil wealth in Iraq, as statistics indicate that it owns 15 fields out of 77 known fields, including 10 fields still producing waiting for development, as these fields contain an oil reserve of more than 65 billion barrels, accounting for 59% of the total Iraqi oil reserves.

Oil revenues provide the Iraqi state budget
The revenues of oil in the budget of 2018 have reached about 74 trillion Iraqi dinars, and non-oil revenues are12 trillion Iraqi dinars, including taxes and fees and capital revenues, which shows that the oil revenues are the mainly source adopted in the budget, which in turn determines the expenses and salaries and jobs and the volume of investments that any defect in the oil sector is reflected directly and negatively on the economic situation of the country.

Basra includes the largest oil fields of Iraq, including:
– Majnoon field is one of Basra’s giant fields, and contains a proven oil reserves ranging between 23-25 billion barrels, producing about 100 thousand b / d, and if it is developed , its capacity will be of 600 thousand b / d.
– Nahran Omar field, whose production is still modest at around 1000 b / d, although it is from the giant fields of Basra, and its capacity after development can reach to the limit of 500 thousand b / d, the main reservoirs produced in this field are reservoirs of Zubayr, the Ri Naher Omar, with one production station, the number of oil wells with 15 wells, and its proven reserves of crude oil is 6 billion barrels.

– West Qurna field, one of Basra’s giant fields, contains a proven reserves estimated at 18 billion barrels, and a potential reserve estimated at 40 billion barrels, and its producing capacity can be up to one million b / d, but currently produces 120 thousand b / d . It is the kind of light oil that is desirable globally . The reservoirs produced are: Al-Mushrif, Al-Saadi, Al-Zubair. The number of oil wells is 247 wells, the water wells are 64 wells and the production stations are 3 stations.
– The northern Rumaila field, one of the giant fields of Basra, and the number of its wells less than 20 in the seventies of the last century but now it has become 340 oil wells, the ninth largest oil field of the world, the layers of it contains the finest oil, and the main reservoirs are: Zubair ( main ),al-Mushrif , Naher Omar, Sejail.
This field contains 7 oil production stations, 6 gas compressor stations, 5 water injection plants, 129 water injection wells, and produces 250,000 barrels per day in its northern and southern parts, and its oil reserves exceed 12 billion barrels.

The extraction of crude oil in Basra is characterized by low production costs, which is the lowest on the global scale; because the oil and gas fields are located on land, very close to the surface of the earth, most of them are economically feasible because of the size of the large reserves and the size of the area and it does not contain, complex geology due to weak mechanical movements of the rocks, especially in the southern region due to the decline of land towards the Arabian Gulf, the estimated cost of exploration per barrel of crude oil in the province of Basra by about 0,1- 0.4 cents / barrel, according to the nature of the oil field discovered, and it was estimated in Zubair and Rumaila fields and other fields close to them by $ 1,570 per barrel.
The giant fields of Basra compete the largest fields in the world, and is characterized by abundant resources of oil, and can easily double the size of the reserve if the adoption of advanced technology, which is drilling for crude oil and extract and export from its ports.

A new oil era
since 2003, Iraq has made little or no revenue from oil production. Most of the export revenues go to foreign companies and the pockets of the corrupt who have kept the oil-loading pumps without meters to measure the loads.
After the popular demonstrations demanding the appointment of ministers of independent technocrats, and specialists in the management of national wealth with the sincerity and determination of reform, based on the efficiency and professional experience was sufficient to start the stage of the rescue of the Ministry of Oil, and since 2016 and under the management of one of the efficient loyal sons of Basra where there is no doubt a bout his scientific and practical experience, and the integrity of his personal history of impurities, in addition to taking dozens of positions in the ministry for more than four decades.
The Ministry has achieved successes in the oil sector, in contrast to the decline current in the country. It is the largest source of income and the only lifeline that supports the country in light of the complete paralysis of all economic activities, in terms of increasing production, investment of new fields, reducing the burning of associated gas and initiating a large revolution to increase oil refining capacity, improve ministry management, restore efficiency standards, and achieve goals and plans in evaluating the performance of the ministry’s institutions and employees, as well as removing many of the tumors of corruption from its joints.
The ministry has achieved a comprehensive recovery of the oil industry in Iraq in the middle of 2016 in light of the sudden collapse of oil prices, in addition to the price of production of each barrel of oil reached to $ 21, and the erosion of infrastructure, and the spread of corruption, and the sharing of sectarian parties for booty in the stronghold of Iraqi wealth through the distribution of positions on those affiliated to them of the semi-illiterate.
Since the ministry entered into its new era, the rate of Basra oil exports has increased by an average of 3.23 million barrels per day, the export capacity of the southern ports increased to 4.6 million barrels per day, and the storage capacity of the province has increased and it has worked on developing export port projects .

And accelerated the pace of reforms and new projects, the ministry started production from many fields that Iraq has never invested in the provinces of Dhi Qar, Maysan, Wasit and East Baghdad. The Ministry has for the first time returned to the management of some projects with its own cadres after the cessation of this type of direct management since 2003.
The Iraqi Ministry of Oil proved its keenness to develop investment in the oil sector at the reconstruction conference held in Kuwait. The projects were submitted to international investors after a thorough study to dispel investors’ fears and ensure them and to lay the scientific foundations for investment that is reflected in the development of the Iraqi national economy.
The ministry is preparing to export gas to Kuwait at a rate of 50 million cubic feet per day from the Rumaila field in the first stage to rise to 200 million cubic feet per day at a later stage and plans to stop the burning of associated gas, which was wasted for decades by setting new controls for the work of companies; It was agreed with German Siemens company to fully exploit it by 2021.
The ministry announced an ambitious plan to increase the capacity of oil exports to 7 million barrels by 2020, after the export capacity of southern ports 5 million barrels per day, but the volume of exports currently stands at about 3.5 million barrels per day; because of the agreement to reduce production between OPEC and the independent producers.
The ministry focuses on implementing investment projects by establishing refineries inside Iraq to increase production capacity of oil derivatives to meet the actual need for domestic consumption.
It also focuses on realizing the aspirations of Iraqis to establish refineries outside the country in cooperation with specialized international companies.
The experience of the Iraqi Oil Ministry in the successful management by one of the sons of Basra, and efficient experiences refute the views of desperate pessimists for the possibility of saving Iraqi institutions after years of corruption, neglect and theft.

Shatha Khalil
Economic Studies Unit
Rawabet Center for Research and Strategic Studies