It is the second day of an oil contract auction being held in Baghdad.Two big oilfield deals were clinched yesterday – depending on how much the bidding companies believe they can extract from the fields on offer today – Iraq could be on the verge of challenging the position of the world’s number one oil producer Saudi Arabia. Iraq has some of the biggest untapped supergiant oilfields on earth – that is: fields with reserves of more than five billion barrels. The West Qurna Phase Two field with a massive 12.9 billion barrels of capacity will go to the highest bidder today. That is expected to be Russia’s Lukoil with a Norwegian company as a junior partner. Iraq has the potential to quadruple its crude output to 10, or even 12 million barrels a day in six or seven years. On paper the future looks bright for Iraq but there are pressing security concerns that could still undermine the nation’s ability to cash-in on its oil assets.
Oil wealth on the Iraqi horizon