Oil reserves in Iraq will 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 150 billion barrels. Officially confirmed reserves rank third largest in the world at approximately 150 billion barrels (24×109 m3).
As a result of military occupation and civil unrest, the official statistics have not been revised since 2001 and are largely based on 2-D seismic data from three decades ago. International geologists and consultants have estimated that unexplored territory may contain vastly larger reserves.
A measure of the uncertainty about Iraq's oil reserves is indicated by the fact that the U.S. Department of Energy (DOE) estimated that Iraq had 112 billion barrels (17.8×109 m3), whereas the United States Geological Survey (USGS) estimated it was closer to 78 Gbbl (12.4×109 m3) and Iraq's prewar deputy oil minister claimed it might have 300 Gbbl (48×109 m3). The source of the uncertainty is that due to decades of war and unrest, much of Iraq oil wells are run down and unkept. Repairs to the wells and oil facilities should make far more oil available economically from the same deposits. In fact, Iraq may prove to contain the largest extractable deposits of oil in the entire Middle East once this upgrading and facility improvements have advanced.
After more than a decade of sanctions and two Gulf Wars, Iraq’s oil infrastructure needs modernization and investment. Despite a large reconstruction effort, the Iraqi oil industry has not been able to meet hydrocarbon production and export targets. The World Bank estimates that an additional $1 billion per year would need to be invested just to maintain current production. Long-term Iraq reconstruction costs could reach $100-billion or higher, of which more than a third will go to the oil, gas and electricity sectors. Another challenge to Iraq's development of the oil sector is that resources are not evenly divided across sectarian lines. Most known resources are in the Shiite areas of the south and the Kurdish north, with few resources in control of the Sunni population in the center.
In 2006, Iraq's oil production averaged 2.0 million barrels per day (320×103 m3/d), down from around 2.6 Mbbl/d (410×103 m3/d) of production prior to the coalition invasion in 2003. Iraq's reserve to production ratio is 158 years.
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