Alistair Dawber: Black gold rush was fuelled by enormous untapped potential

The Foreign Office was not wrong in its November 2002 memo: "Iraq is the big oil prospect." But it should have come as no surprise to those in Whitehall that BP, and other oil companies, were "desperate" to get a slice of the pie that was seemingly already being carved up five months before the invasion.

Conservative estimates put about 115 billion barrels of oil beneath the Iraqi desert, ranking the country fourth in the global league table behind Saudi Arabia, Canada and Iran. But even that staggering number does little to explain just how much oil Iraq might be sitting on.

According to the US Energy Information Administration, the 115 billion barrel figure is a best guess based largely on unsophisticated 2-D seismic data, most of which dates back nearly 30 years. Geologists believe the real figure could be 45 to 100 billion barrels higher.

Because of the limits on exports during the Saddam era, and its consequential tardy approach to development, much of the untapped oil may be brought online with only limited investment. And yet the development of the post-war oil industry in Iraq has been embarrassingly moribund.

Insurgency and conflict, as well as a poor perception of the global industry within Iraq, has acted as a brake on production, limiting output to less than 3 million barrels a day by the end of last year: the country has produced between 2.4 and 2.6 million barrels since the 2003 invasion – a tepid performance, making Iraq only the world's 10th biggest oil producer.

BP penned a memorandum of understanding in 2005 to provide technical assistance at the huge Rumalia field in southern Iraq, in which it now holds a 39 per cent stake. Within five years BP is hoping to triple output to 2.85 million barrels per day, accounting for 3 per cent of global annual output.

It is not just BP that is beginning to reap the benefits of the overthrow of Saddam. The group's partners at Rumalia include CNPC, the state-owned Chinese group, and an Iraqi oil company.

Elsewhere, the list of oil companies that now have interests in Iraq reads like a who's who of the world's biggest resources groups.

Total, the French giant that BP professed so much concern about in November 2002, holds a stake in the Halfaya field, which holds a mere 4.1 billion barrels at the best estimate. Other international "majors" from Brazil, Norway, Kazakhstan and a host of other countries also have the rights to vast pools of Iraqi oil.

That the war in Iraq was motivated by oil has been supported by those against the invasion, and denied by all the protagonists, despite some rather sketchy retrospective justifications. What is undoubtedly true is the benefit to the world's biggest oil companies is likely to be profound.