IRAQ - The Risks For The US.

The following are extracts from an article by Barry R. Posen, director of the Security Studies Programme at the Massachusetts Institute of Technology (MIT), published on April 19 by The Boston Globe (with minor editing and underlining by APS): "Supporters of the war in Iraq, including most recently Senator John McCain, tell us that a series of awful consequences will certainly result if US forces disengage. This argument is offered with great confidence. Yet the costs of disengagement are less certain than is often argued, and the United States can reduce the risks that these costs will arise - and limit their consequences if they do.

"Supporters of the war predict six major disasters if US forces withdraw: Al-Qaeda will take over the country. This risk is nonexistent. Al-Qaeda's support is strongest among Sunnis, whom the Shi'ites outnumber by three to one. The Shi'ites control the military, the police, and numerous militias. The United States has ramped up its operations in Baghdad in part to stop the Shi'ites from cleansing the Sunnis.

"There will be no caliphate in Baghdad, whether Americans stay or leave. Iraq will become a new Afghanistan, to al-Qaeda's benefit. The most extreme among the Sunni insurgents (the Neo-Salafis) may indeed be committed to international jihad, and they may continue to work clandestinely out of Iraq, as they do today. But these jihadis will not be comfortable. Iraqi Shi'ites despise them, and even many Sunnis oppose them. US intelligence will indeed have to keep an eye on them, and special operations forces may occasionally need to sneak back into Iraq to strike at them. These are capabilities the United States has spent billions building up since Sept. 11.

"The current civil war (or wars) will escalate. Fighting may indeed intensify after a US disengagement. To come to an understanding of how wealth and power in Iraq will be shared, the political forces there must measure their relative capacity and will. The United States now stands in the way of such a measurement, and the US presence de-legitimizes any outcome. The promise of a certain withdrawal date may clear the heads of some Iraqi politicians; a negotiated settlement could start to look better to them than an escalation of fighting.

Genocide: "The humanitarian consequences of this intensified fighting could be grave. But genocide happens against unarmed populations; all groups in Iraq are heavily armed. Still, the violent ejection of minorities from particular areas is likely. Instead of convincing minorities to stay in neighborhoods where they are vulnerable, the United States can help people resettle in parts of Iraq that are safer. If the civil war intensifies, regional powers will rush in. This too is already under way, but escalation into a giant civil war is not in anyone's interest. Syria, Iran, and Turkey have Kurdish minorities which may become restive during such a war. The Saudis would likely prefer that their Sunni Arab friends make a deal, rather than wage a fight that they might lose. Even Iran, whose Shiite co-religionists stand to win such a war, faces risks.

"The Arab Shi'ites are not one big happy family; they kill one another in Iraq today. Most Iraqi Shi'ites think of themselves as Arabs; heavy-handed Iranian intervention may energize their nationalist opposition. The United States can engage diplomatically to remind the regional players of their interest in stabilizing Iraq. If the United States leaves Iraq deliberately, and under its own power, it still has cards to play.

The worst case: The civil war escalates; outsiders back their friends; their friends begin to lose, so the war escalates to become a regional conflagration. Could happen, but one should not exaggerate the military capabilities of any of the local players. They are all heavily armed, but conventional warfare is not the strong suit of any of the regional actors, with perhaps the exception of Turkey.

"The Saudi forces are almost surely helpless without help from Western contractors. Iran's air forces are obsolete. Moreover, Saudi Arabia and Iran are one-crop countries; each depends on oil facilities that are vulnerable to attack by the other. A kind of Mutual Assured Destruction should deter both from risking general war.

"Four years of experience strongly suggests that the costs to the United States of persisting in Iraq will be significant. Whatever success is achieved, the end result will not be the stable liberal democratic vision of the war's supporters. Rather, after lots more killing, exhaustion may set in, deals may be struck, and factions may retreat to tend their own battered gardens.

"Call this what you will, but it cannot justify the costs incurred. And this outcome will not differ significantly from what will occur if the United States begins to disengage now".

Iraq May Hold Twice As Much Oil: Iraq could hold almost twice as much oil in its reserves as had been thought, according to an independent study of its resources. The study, by HIS, sees potential presence of a further 100 bn barrels in the predominantly Sunni western desert, which highlights the opportunity for Iraq's Sunni Arabs to match the country's Shi'ite Arabs in the south and the Kurds of the north in terms of petroleum wealth. It also highlights the western desert's opportunity to be one of the world's biggest oil suppliers, and its attractions for IOCs - if the sectarian conflict in Iraq can be resolved.

If confirmed, it would raise Iraq from the world's third largest source of oil reserves with 116 bn barrels to second place, behind Saudi Arabia and overtaking Iran.

Other studies, including one by a prominent Iraqi expert, have put Iraq's potentially recoverable oil reserves at more than 360 bn barrels, larger than those of Saudi Arabia.

The study from IHS, a consultancy, estimates that Iraq's crude oil production could be increased from its current rate of less than 2m b/d to 4m b/d within five years, if IOC investment begins to flow. That would put Iraq in the top five oil-producing countries in the world, at current rates. The IHS study is based on data collected in Iraq both before and after the invasion, showing the oilfields' reserves and production history. Its estimate is based on analysis of geological surveys. Production costs in Iraq are low, particularly compared to the more complex offshore developments. IHS estimates they are less than $2/barrel.

Ron Mobed, CEO of IHS, was on April 20 quoted as saying: "Obviously the security situation is very bad, but when you look at the sub-surface opportunity, there isn't anywhere else like this. Geologically, it's right up there, a gold star opportunity". Of Iraq's 78 oilfields identified as commercial by the government, only 27 are currently producing. A further 25 are not yet developed but close to production, and 26 are not yet developed and far from production. The government has estimated that it would need $20-25bn of investment from IOCs to get production up to its full potential.

Production methods have advanced greatly in the past two decades, and methods such as horizontal drilling have yet to be deployed in Iraq. The introduction of modern technology by IOCs has the potential to deliver steep increases in oil recovery. Almost all the leading IOCs and many smaller ones have expressed an interest in working in Iraq. So far the only new contracts for developments by foreign companies are the eight PSAs signed by the Kurdistan Regional Government (KRG) in the relatively peaceful north of Iraq.

Iraq's cabinet plans to present its proposed petroleum law to parliament after study of recommendations made in a Dubai conference on April 18-19. The conference was attended by leading Iraqi politicians and technocrats, including Oil Minister Hussein al-Shahristani.

The Sunni Arabs have until now been strongly hostile to the federalism espoused by most Kurds and some Shi'ites, arguing that it would deprive their less well-resourced heartland in the centre of the country of the petroleum resources.

Iraq Atlas, to be released on May 9 by IHS, says: "Iraq's reserves are clearly phenomenal. Once the infrastructure is in place, the oil will come out of the ground quite cheaply". Mobed on April 20 said: "Iraq is moving very rapidly towards an encouragement of foreign investment - especially compared to other huge reserve holders in the region where access is essentially nil... Doubling Iraq's production capacity in the next five years doesn't feel like a stretch. It's just a matter of opening up what's been shut in and bringing on improvements to the remainder".

IHS says Iraq's production in the mid-term could reach 6m b/d. Muhammad Zine, IHS regional manager for the Middle East, said sanctions and wars had taken their toll on Iraq's workhorse oilfields - Kirkuk in the north and Rumaila in the south, adding: "There is some damage, but it's not irreparable". Kirkuk has the ability to produce more than 600,000 b/d but is pumping only 350,000 b/d, while Rumaila oilfields could produce at least 1m b/d.

Most of Iraq's proven oil reserves are in the Shi'ite south and the Kurdish north. That has left Sunni Arabs in central and western Iraq fearful that autonomous deals by those regions would cut them out of Iraq's oil wealth. But Zine said the centre of the country held prized oilfields such as East Baghdad.