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BP: Rising production in Iraq


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by Christian DeHaemer, contributing editor Wealth Daily

In terms of oil production, there is some good news from Iraq. The country is poised to have the world's largest surge in oil exports.

Iraq is the only country in the region with the ability to ramp up its oil production. It has 115 billion barrels of proven reserves and as many as 200 million of estimated reserves. These have been mostly untouched for 20 years.

With new terminals operating, they can export as much as 2.5 million bpd – the highest amount since before the U.S. invasion, though still well below the all-time high of 12.5 million bpd. The new goal is 13 million bpd by 2017.

That goal seems reachable and would represent a 420% increase in output in just five years.

One way to play this is to buy the much maligned BP (BP), which is a major player in Iraq and has the service contract for the Rumaila field, Iraq's largest that has the potential to produce 3 million bpd on its own. BP is also working on the Kirkuk oil field in the north.

It has a p/e of just 5.28 which is about half of Exxon Mobil's 9.95, and has a 17.1% quarterly growth rate. Exxon is growing at 15%. BP also pays a 4.60% forward dividend yield compared to XOM's 2.3%.

Learn more about this financial newsletter at Wealth Daily.

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