July 11, 2002, Times Newspapers

   West sees glittering prizes ahead in giant oilfields

   By Michael Theodoulou in Nicosia and Roland Watson

   THE removal of President Saddam Hussein would open Iraqs rich new
   oilfields to Western bidders and bring the prospect of lessening
   dependence on Saudi oil.

   No other country offers such untapped oilfields whose exploitation
   could lessen tensions over the Western presence in Saudi Arabia.

   After Kuwait's liberation by US-led forces in 1991, America
   monopolised the postwar deals, but the need to win international
   support for an invasion is unlikely to see a repeat.

   Russia, in particular, and France and China all permanent members of
   the United Nations Security Council have high hopes of prising
   promises of contracts in a liberated Iraq from a United States that
   may need their political support.

   President Bush has used the War on Terror to press his case for
   drilling in a protected Arctic refuge, but predicted reserves in
   Alaska are dwarfed by the oilwells of the Gulf. Anthony Cordesman,
   of the Centre for Strategic and International Studies in Washington,
   said that the issue for the US was as much the security of the Gulf as
   access to particular oilfields.

   "You are looking down the line to a world in 2020 when reliance on
   Gulf oil will have more than doubled. The security of the Gulf is an
   absolutely critical issue."

    Gerald Butt, Gulf editor of the Middle East Economic Survey, said:
   "The removal of Saddam is, in effect, the removal of the last threat
   to the free flow of oil from the Gulf as a whole."

   Iraq has oil reserves of 112billion barrels, second only to Saudi
   Arabia, which has some 265billion barrels. Iraqi reserves are seven
   times those of the combined UK and Norwegian sectors of the North Sea.
   But the prize for oil companies could be even greater. Iraq
   estimates that its eventual reserves could be as high as 220billion barrels.

    Three giant southern fields - Majnoon, West Qurna and Nahr Umar have
   the capacity to produce as much as Kuwait. The first two could each
   equal Qatar's production of 700,000 barrels a day. "There is nothing
   like it anywhere else in the world. Its the big prize," Mr Butt said.

   Extraction costs in these giant onshore fields, where development has
   been held up by more than two decades of war and sanctions, would
   also be among the lowest in the world. Provided that the US can ensure
   stability in a post-Saddam Iraq, it would take five years, at most, to
   develop the oilfields and Iraqs prewar capacity of three million
   barrels a day could reach seven or eight million, industry experts
   said.

   However, regime change in Baghdad will be of little value to
   international oil companies unless it is followed by a stable Iraq
   with a strong central government. Companies cant go in unless there is
   peace. To develop Majnoon, you need two to three billion dollars and
   you dont invest that kind of money without stability, one industry
   analyst said.

   Copyright 2002 Times Newspapers Ltd.