Iraq has announced a major oil discovery in an exploration block in the south, with estimated potential reserves of 8.8 billion barrels.
The Qurnain Block, in the largely underdeveloped desert area in Najaf province near the border with Saudi Arabia, is being explored by China’s Zhenhua. It won the rights to explore and develop for oil and gas during the latest licensing round in 2024.
Oil Minister Hayan Abdel Ghani announced the discovery in a statement issued after a meeting with the Chinese company on Wednesday. “The importance lies in accelerating work phases to achieve the oil projects’ objectives for sustained crude production and gas utilisation,” Mr Abdel Ghani said.
The Qurnain block covers 8,773 square kilometres and is considered one of the country’s most promising exploration areas. An Oil Ministry statement said the discovery was made at a depth of 1,916–1,965 metres, with an “estimated potential of 8.8351 billion barrels and a daily production rate of 3,248 barrels of light crude”.
Zhenhua presented a proposal for rapid investment in the block during the meeting, it added.
The Qurnain discovery is a milestone in Iraq’s licensing strategy, which aims to bring new players and capital into underexplored areas beyond the country’s mature southern fields. Officials have repeatedly stressed the need to boost production capacity and reduce gas flaring as part of Iraq's energy security and revenue diversification plans.
The most recent fifth and sixth licensing rounds were launched to attract investment in frontier blocks, mainly in western and central Iraq, regions that have only been explored to a limited extent due to security and logistical challenges. The discovery at Qurnain could encourage further activity in adjacent blocks along the Saudi border.
Encouraged by an improved security situation, Iraq began to open its oilfields to international companies for development in 2009. Among the major oil companies to enter the country were the US‘s Exxon Mobil, Royal Dutch Shell, the UK’s BP, China’s CNPC and Russia’s Lukoil.
Since then, Iraq has awarded dozens of contracts to develop major fields, including ones that hold more than half of its 145 billion barrels of proven reserves. Contracts to tap natural gas resources have also been awarded. Production crossed four million barrels per day – up from nearly 2.4 million bpd in 2009, and exports reached around 3.5 million bpd, according to Oil Ministry data.
Production has declined to around 1.5 million bpd since the closure of the Strait of Hormuz, the main route for energy exports from the region, due to the Iran war. The current output is for local consumption and the export of around 200,000 bpd, which is pumped to Turkey's Ceyhan port.
Oil revenue, which accounts for 90 per cent of Iraq's budget, has declined by more than 70 per cent since the war began on February 28 – from $6.8 billion in February to $1.96 billion the following month, according to the Oil Ministry.
