Iran and Iraq have agreed on three ways of investing in joint oilfields based on a memorandum of understanding which has been signed recently, an official with Iraq Oil Ministry has said.
Iraqi Aswat Al-Iraq news agency quoted Sabah al-Saadi, the director of the oil ministry for legal and commercial affairs, as saying that, "direct investment, giving each state its share to invest, or giving the field to a neutral company to invest in, are the three agreed ways for financing the joint fields' development plans."
In July, Iran and Iraq signed two memorandums of understanding regarding the management of joint oil fields and bilateral energy issues following three days of talks. The memorandums dealt with the training of personnel in the energy sector as well as drilling service operations and research and development.
Several oil fields straddle the Iranian border with Iraq. Iraq is keen on moving toward recovery in its national energy sector as it emerges from years of conflict following the U.S.-led invasion of 2003. Iran, for its part, has pushed to develop its own resources in spite of global economic sanctions.
The value of Iran's oil exports to Iraq stood at 3 billion dollars in 2008 but Iraq forecasts that it will rise to 4 billion dollars in 2009.
Oil reserves in Iran, according to its government, rank third largest in the world at approximately 136 billion barrels as of 2007, although it ranks second if Canadian reserves of unconventional oil are excluded. This is roughly 10% of the world's total proven petroleum reserves.
Iran is the world's fourth largest oil producer and is OPEC's second-largest producer after Saudi Arabia. As of 2006 it was producing an estimated 3.8 million barrels per day of crude oil, equal to 5% of global production.
At 2006 rates of production, Iran's oil reserves would last 98 years if no new oil was found.
Oil reserves in Iraq could be the largest in the world according to recent geological surveys and seismic data. The Iraqi government has stated that new exploration showed Iraq has the world's largest proven oil reserves, with as much as 350 billion barrels.
Officially confirmed reserves rank fourth largest in the world at approximately 115 billion barrels.