Iraq may have 350 bln barrels of oil: Deputy PM

By Dean Yates

BAGHDAD (Reuters) - Iraq may have oil reserves of 350 billion barrels, Deputy Prime Minister Barham Salih said on Monday, a massive figure that is triple the country's proven reserves and which even exceeds the oil in Saudi Arabia.

Salih said he had seen estimates from "reputable sources, reputable companies" that put Iraq's reserves at up to 350 billion barrels. He declined to name the sources.

Iraq's current proven reserves are 115 billion barrels, already the world's third largest. The country produces around 2.3 million barrels of oil per day (bpd).

"The real tragedy of this country is that Iraq is home to possibly the world's largest oil reserves. Some estimates put it at 350 billion barrels," Salih, a key player in attempts to finalize a draft national oil law, told Reuters in an interview.

"Extraction costs are very minimal compared to anywhere else in the world and we are still at 2 million barrels a day of exports. It's ridiculous."

Saudi Arabia has about 264 billion barrels of oil, according to statistics compiled by BP. Iran is next with around 137 billion barrels then Iraq with 115 billion.

Iraq, whose primary source of revenue comes from oil, needs huge amounts of investment to boost oil output but also to rebuild the country after years of sanctions and war.

Delays in approving the oil law to govern the industry have held back investment -- the current draft being negotiated for example was first agreed by the cabinet in February 2007.

Salih said it was hard to say when the draft might get to parliament, but added there was fresh momentum following recent talks, including discussions with the government in the largely autonomous region of Kurdistan in northern Iraq.

"What I have witnessed over the past three weeks is renewed commitment from the senior leadership to bring this issue to closure, but I do not underestimate the challenges," he said.

Salih said talks with officials from the Kurdistan Regional Government (KRG) including Nechirvan Barzani, its prime minister, had been positive.

Some Iraqi officials say contracts signed by the KRG with foreign firms are to blame for holding up the draft oil law. Iraq's oil ministry says the deals are illegal.

But Salih said issues of contracting could be resolved.

He said the KRG had committed to a "transparent" contract process and given its commitment that all revenue from contracts signed in Kurdistan would be retained by the central treasury.

"SUPER MONOPOLY"