Monday, March 03, 2008

The Chalabi Cousins and Pie in the Sky Oil News

Remember Ahmed Chalabi, the head of the Iraq National Congress and darling of the neoconservatives? He did much to feed false information about Iraq to the Bush Administration and somehow, curiously, was never brought to account. He has done well.

After failing to lead some sort of democratic revolution that Bush and his friends were counting on, Chalabi somehow got involved in various aspects of Iraqi government including some aspects of oil. He's now involved in debaathification but still has connections to Iraq's oil business and has a cousin who was the oil minister. We wouldn't want to judge people by their relatives but Fadhil Chalabi sounds too much like his more famous cousin who was very adept at telling people what they wanted to hear:
Chalabi, a former senior Iraqi oil ministry official, believes the country has huge undiscovered reserves on the grounds but no major development projects have been undertaken for more than two decades.

The proven reserves were officially put at 112 billion barrels in 2007 but Chalabi believes the final figure could exceed 300 billion barrels. “Iraq could have this figure, there is no exaggeration in this,” he said.

Iraq has large proven oil reserves that are substantial but there's been a tendency for countries in the Middle East to exaggerate their reserve potential. Even Saudi Arabia wants us to believe that it might have large undiscovered reserves in its 'Empty Quarter.' There are people, including Fadhil Chalabi, who argue that Iraq may have more oil than Saudi Arabia though they don't seem to make clear whether those reserves might be more than Saudi Arabia's fictitious figures or its real figures. This begs the question of course of motivation. If an Iraqi is genuinely concerned about the future of his country, should he speak up now about possible reserves or should he wait until after the Americans leave?

There's been a tendency since the sharp oil price hikes in 2005 for reports on new oil finds to focus on the high end of possible reserves. It doesn't seem to matter whether the oil finds are in the Gulf of Mexico, Brazil or Siberia. To date, the high numbers have not been justified. We have a problem and we're still moving in slow motion to deal with it.

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