Iraq to resume oil exploration after 20 year pause

BAGHDAD (Reuters) - Iraq will resume searching for oil on Friday for the first time in two decades, the oil ministry said on Thursday, in the hope of finding vast reserves that lay undiscovered because of sanctions and war.

Iraq has 115 billion barrels of proven oil reserves, the third largest in the world, but the government believes the country's actual oil reserves may be three times as high.

Asim Jihad, spokesman for Oil Ministry, said it had trained three teams of geophysicists, geologists and engineers and would kick off exploration in the Gharraf field in Nassiriya in southern Iraq on Friday.

"Tomorrow, the equipment will be turned on to start the first oil exploration for 20 years, at a ceremony which will be attended by the oil minister and senior officials," Jihad said on Thursday.

Jihad said Iraq had only used about a fifth of the country's 500 possible oil-producing sites and they needed to explore more to try and confirm potential reserves.

"These three teams are part of a group the oil ministry formed to renew exploration activity in order to change the unconfirmed reserves to confirmed ones," he said.

The first team will carry out seismic tests on the Gharraf field using up-to-date technology supplied by international companies, he said.

Deputy Prime Minister Barham Salih told Reuters in April he had seen estimates from "reputable companies" that put Iraq's oil reserves at some 350 billion barrels, a massive figure which would put the country ahead of Saudi Arabia.

Saudi Arabia is currently ranked first in the world with proven reserves of about 264 billion barrels, followed by Iran with some 137 billion and then Iraq on 115 billion.

Iraq, whose primary source of revenue comes from oil, needs huge amounts of investment to boost oil output and rebuild the country after years of sanctions and war. Violence in the country is now at its lowest since 2004.

Iraqi Oil Minister Hussain al-Shahristani also said in June Baghdad hoped to let foreign firms bid on many non-producing oil fields and potential oil deposits from next year.

Shahristani said Iraq had begun to work on which fields would be candidates for bids. This would include fields that had proven reserves but where no production was taking place.

Separate exploration licenses would also be offered for certain potential fields, he said.

(Writing by David Clarke; editing by Peter Graff and Marguerita Choy)