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New Iraq, Iran oil reserve data 'dodgy'

London, October 13, 2010

Moves by Iraq and Iran to raise sharply estimates of their oil reserves are politically motivated and not justified by evidence, a former Iraqi oil minister has said.   

Issam Al-Chalabi, who served as Iraqi oil minister in the government of Saddam Hussein, told Reuters Insider television  Iraq's announcement last week that its proven oil reserves were 25 percent higher was "unreliable."

"Unfortunately the announcement that was made last week has not been substantiated by proper evidence," Chalabi said on the sidelines of an industry conference.   

"It is not a reliable figure. This is not the way to handle the reserves. I think it was made for political reasons."    

Iraq raised its total estimate of proven oil reserves to 143 billion barrels, making it the holder of the world's third largest reserves after Saudi Arabia and Venezuela, according to BP data.   

Iraqi officials said the figures had been inflated by new estimates for the West Qurna and Zubair oilfields. But Chalabi, who was Iraqi oil minister from 1987 to 1990,  questioned the motivation for the new estimate.

"Iraq has been without a government for seven months now," Chalabi said. "The outgoing government maybe would like to present the public with achievements."    

Chalabi also cast doubt on an upward revision to Iran's oil reserves estimates announced on Monday. He said the Iranian reserves revision, which would take Iranian reserves back to third place above Iraq was also "unreliable."  

Iranian Oil Minister Massoud Mirkazemi said on Monday Iran had 150.31 billion barrels of oil reserves, up from a previous estimate of 138 billion barrels and added that figure would be revised even higher soon.

"Again, that's not credible and again that was not substantiated by proper evidence," Chalabi said.   

Analysts have expressed scepticism over the change in the two countries' estimates, which come ahead of a meeting of the Organization of the Petroleum Exporting Countries on Thursday.   

Some have suggested the rivals are in a "bidding war" over their oil reserves, which are usually a consideration in discussions over output targets set by the oil producer cartel.

"Everybody knows that oil in place in Iraq is abundant," Chalabi said. "But they need to justify that with more solid evidence without making such announcements."    

Turning to natural gas, Chalabi said a lack of interest in Iraq's upcoming gas field auctions could force Baghdad to look for other ways to develop the country's huge gas reserves.

Thirteen companies have qualified to bid in the Oct. 20 auctions to develop the Akkas and Mansuriyah fields, unsuccessfully put up for auction in 2009, and the smaller Siba field. - Reuters




Tags: Iran | Iraq | oil reserves | Chalabi |

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