From
http://www.metimes.com/2K3/issue2003-11/bus/war_with_iraq.htm

War with Iraq "could herald new era for oil":
Iraqi expert by Peter Walker LONDON, MARCH 14

A successful war against Iraq could usher in a "new era" for global oil production and a radical reduction in oil prices, an oil industry seminar in London was told Friday.

By the end of the decade, Iraq could be producing eight million barrels a day, possibly rising as high as 10 million barrels, a former top official at Baghdad's oil ministry and OPEC told the gathering.

If global energy demand fails to grow as quickly as forecast, this could re-draw the map of world oil supplies, said Fadhil Chalabi, who now heads a leading energy think-tank.

"With fair political and commercial conditions, post-Saddam Iraq can emerge as a new super-giant oil-producing country in the world," he said.

Iraqi oil stocks, largely unexplored, could be as high as 200 billion barrels, said Chalabi, executive director of the Centre for Global Energy Studies, which organised the forum.

Despite often bullish forecasts of high growth in energy demand over the coming years, a combination of environmental concerns and punitive consumption taxes in the developed world coupled with economic slumps in Asia could see these unfulfilled, he said.

"This situation will weaken enormously OPEC's ability to steer the world market and could, in effect, herald a new era of cheaper oil prices," said Chalabi, who was deputy general secretary of OPEC for a decade.

But it was not all gloom for the Organization for Petroleum Exporting Countries, he added, saying that lower prices could return more production to the traditionally lower-cost areas of the Middle East.

"There is a possibility that with this additional oil, there could be a shift in the map of oil supplies from the high-cost areas to the low-cost areas," he said.

Another major factor in a shift of global oil supplies towards Iraq would be increased security due to Iraqi pipelines which allowed the country to avoid the Gulf when exporting its supplies.

"Since the events of September 11, there have been growing concerns about the security of supplies from the Middle East," he said, adding that much of this was centred around Saudi Arabia – which he noted was both the "pillar" of global supplies and the country of many al-Qaeda terrorists.

"If anything happened to (Saudi Arabia) then the oil market would be in great disruption," he said. "But Iraq's oil is exportable entirely via the Eastern Mediterranean."

However, with Iraq's oil sector in disarray after decades of nationalised control and sanctions, major structural changes would be needed, he added, notably partial privatisation.

"I belive that the era and idea of oil nationalism is gone," he said. "We have to be more realistic."

AFP