Re: oil crises.

["Devine, James" <jdevine@xxxxxxx>]

so we're both right. What I was saying was that _given its current technology, etc._ Iraq was a high-cost producer in 1990 (before it moved into Kuwait). What you are saying is tht it _could be_ a lower-cost producer if modern methods were introduced, etc. (This, it seems, is a motivation of the Bushwackers' unfriendly take-over bid there.)
Jim D.

	-----Original Message----- 
	From: dmschanoes [mailto:dmschanoes@xxxxxxxxxxxxx] 
	Sent: Mon 3/8/2004 6:33 PM 
	To: PEN-L@xxxxxxxxxxxxxxxx 
	Cc: 
	Subject: Re: [PEN-L] oil crises.
	
	

	----- Original Message -----
	From: "Devine, James" <jdevine@xxxxxxx>
	To: <PEN-L@xxxxxxxxxxxxxxxx>
	Sent: Monday, March 08, 2004 8:14 PM
	Subject: Re: [PEN-L] oil crises.
	
	
	(a civil conversation)
	
	> DMS:  But Iraq is not a high cost producer of oil, having a
	> cost of production approximately
	> equal to Saudi Arabia, the low-cost producer.
	
	JD: I have heard otherwise from other sources.
	____________________________________________
	From the US Energy Information Agency
	
	http://www.eia.doe.gov/emeu/cabs/iraq.html
	
	Iraq's oil development and production costs are amongst the lowest in the
	world (perhaps $3-$5 billion for each million barrels per day), making it a
	highly attractive oil prospect. However, only 17 of 80 discovered fields
	have been developed, while few deep wells have been drilled compared to
	Iraq's neighbors. Overall, only about 2,300 wells reportedly have been
	drilled in Iraq (of which about 1,600 are actually producing oil), compared
	to around 1 million wells in Texas for instance. In addition, Iraq generally
	has not had access to the latest, state-of-the-art oil industry technology
	(i.e., 3D seismic, directional or deep drilling, gas injection), sufficient
	spare parts, and investment in general throughout most of the 1990s.
	Instead, Iraq reportedly utilized sub-standard engineering techniques (i.e.,
	overpumping, water injection/"flooding"), obsolete technology, and systems
	in various states of decay (i.e., corroded well casings) in order to sustain
	production. In the long run, reversal of all these practices and utilization
	of the most modern techniques, combined with development of both discovered
	fields as well as new ones, could result in Iraq's oil output increasing by
	several million barrels per day