CAPITAL: Baghdad

MONETARY UNIT: Dinar

REFINING CAPACITY: 347,500 b/cd

OIL PRODUCTION: 1.07 million b/d

OIL RESERVES: 112.5 billion bbl

GAS RESERVES: 109.8 tcf

Iraq`s first 180 days of limited oil exports allowed under United Nations Security Council Resolution 986 ended in June 1997 with exports totaling 120 million bbl. Because of disputes between Iraqi President Saddam Hussein and the U.N., exports didn`t resume under the second 180 day period until mid-August.

Under Resolution 986, imposed after the country`s invasion of Kuwait in 1990, Iraq could export enough oil to raise $2 billion, plus transit fees for the Iraq-Turkey Pipeline, every 180 days, subject to approval. Proceeds were supposed to go to humanitarian purposes in Iraq under U.N. supervision.

The U.N. secretary general reported that Iraq exported 51.6 million bbl in the first 90 days of its first export period and 67.9 million bbl in the second. Average production according to these figures would be 667,000 b/d.

The Centre for Global Energy Studies in London and Middle East Economic Survey in Nicosia, Cyprus, estimated that Iraq also produced 440,000 b/d of oil for local consumption and exported additional volumes through neighboring countries. Additional exports, according to estimates, were 40,000 b/d of gas oil smuggled through Iran, 50,000 b/d of products to Turkey, and 70,000 b/d of oil under a U.N.-approved bilateral deal to Jordan.

If these estimates were correct, Iraqi production during the first 180 days of the U.N. deal amounted to 1.3 million b/d.

During the third quarter, U.N.-sanctioned exports exceeded that level as Iraq made up volumes not shipped during the disagreements early in the year`s second half. And there was some doubt that Saddam would accept the UN`s rollover of Resolution 986 for a third half-year starting in December.

Saddam ultimately accepted the rollover, but his reluctance showed that his determination to export oil under the program had limits.

In November, he roiled oil markets by expelling American members of the UN team inspecting Iraqi sites for evidence of weapons of mass destruction. All members of the inspection team left Iraq for several days, during which worries mounted that the tensions would escalate into a military confrontation.

Saddam eventually allowed the weapons inspectors to return, but not before extracting several technical concessions on the inspection team`s makeup and practices.

Attracting investors

While subject to the UN embargo on its oil exports, Iraq worked to attract international investors to its oil and gas projects.

Iraqi oil authorities were reported to be giving priority to rehabilitation of production facilities, followed by development of discovered giant fields, then smaller ones, and, finally, exploration of new acreage in the western desert.

Baghdad promised production-sharing agreements (PSAs) for giant West Qurna, Majnoun, Nahr Umr, Al Halfaya, and Ahdab fields to foreign companies.

Before the Persian Gulf war, Iraq had capacity to produce 3.5 million b/d of oil.

Baghdad released target production capacity figures of 2.6 million b/d within 1 year after U.N. sanctions were lifted and 2.9 million b/d within 2 years.

Through new developments, Iraq aimed to boost total sustainable oil production capacity to 4 million b/d in 2000, 6 million b/d in 2010, and 7 million b/d in 2020.

Iraq`s Ministry of Oil claimed the country had crude oil reserves totaling 112 billion bbl, with potential to reach 214 billion bbl. Gas reserves were estimated at about 110 tcf.

Iraq`s oil ministry said 33 discovered and appraised oil fields, with combined production capacity of 4.65 million b/d, had been earmarked for development.

Iraq in 1997 exported oil to Ceyhan, Turkey, through a 1.2 million b/d capacity pipeline. Another pipeline, crossing Saudi Arabia to the Red Sea port of Yanbu, was closed in August 1990.

Additional exports are from Mina al-Bakr tanker terminal, which can receive vessels as large as 350,000 dwt.

Transportation

Late in December 1996, Iraqi and Turkish energy ministers agreed to hold discussions over exports of natural gas by pipeline from northeastern Iraq to Turkey.

Amir Rasheed, Iraq`s oil minister, and Recai Kutan, Turkey`s energy minister, agreed to set up specialized committees to debate feasibility of building a 10 billion cu m/year gas pipeline.

The talks were the result of a memorandum of understanding signed in March 1996 by Iraq`s Northern Oil Co. and Turkiye Petrol Raffinerileri.

Plans call for gas to be transported to Turkey`s Anatolia region through a 1,380-km pipeline with two compressor stations. Total cost of field development and pipeline construction was estimated at $2 billion. The contract period is for 20 years.

GAS supplies for the project were expected to come from development of six gas fields in northeastern Iraq with total nonassociated gas reserves of 270 billion cu m, along with a similar volume of gas from the gas caps of oil producing fields in the area.

GAS fields and each field`s proven reserves allocated to the pipeline project are al-Anfal, 50 billion cu m; Chemchemal, 60 billion cu m; Jaria Pika, 25 billion cu m; Khashm al-Ahmar, 40 billion cu m; al-Mansuriyah, 90 billion cu m; and Tel Ghazzal, 5 billion cu m.

Limited exploration work had been carried out in these fields apart from al-Anfal. Initial plans called for development of al-Mansuriyah and al-Anfal, with a gas production center in each field.