A UT System regent’s day job could make him a billionaire thanks to a new oil well drilled in Iraq.

ShaMaran Petroleum Corp. announced a new well last month in Iraq’s Kurdistan region could produce hundreds of millions of barrels of oil. UT System Regent Alex Cranberg is chairman of Aspect Holdings, LLC, whose subsidiary, Aspect Energy International, LLC, is a partner of ShaMaran and Houston-based Marathon Oil on the well. Aspect, which has the largest stake in the project, holds 53 percent of the oil exploration license for the land where the well was drilled. Aspect could see a combined return on investment close to $1 billion if it buys out ShaMaran’s stake in the project, estimated to reach $500 million, according to Forbes Magazine.

Cranberg declined to answer The Daily Texan’s questions about the well in an email but told Forbes that partners involved in the project have invested more than $130 million.

“I am a big believer in the Kurdish Region and its long-term prospects for prosperity,” Cranberg told Forbes. “I intend always to be an investor in Kurdistan one way or another.”

Testing rates on the well totaled 42,212 barrels of oil per day, according to a statement from ShaMaran Petroleum. Average wells in the Middle East produce between 5,000 and 10,000 barrels of oil per day, said Erik Kreil, international petroleum expert for the U.S. Energy Information Administration.

“That’s a sizable well anywhere in the world,” he said. “It could also push for an increased production rate in Iraq, who is trying to export 200,000 barrels of oil per day by the end of the year.”

Forbes reported ShaMaran’s share value increased $100 million after news of the well broke. Representatives of ShaMaran Petroleum did not return multiple requests for comment.

Oil production in Iraq has steadily increased since 2007. The U.S. Energy Information Administration estimated Iraq’s oil reserves at 143.1 billion barrels in 2012, ranking fourth in the world behind Saudi Arabia, Canada and Iran.

“Iraq is notable because it’s one of the last areas that has been heavily unexplored,” Kreil said. “National oil companies usually control oil production in places like Saudi Arabia, but Iraq is one of the places where an outside company can make profits.”

Kreil said Iraq’s production potential has hardly been tapped into because of insufficient infrastructure to export oil at a high volume and a lack of a national hydrocarbon law to govern oil contracting and regulation.

“American companies are coming in with the resources needed, but they are frustrated because of a lack of a national hydrocarbon law that would protect investors and set the rules of the game,” he said.

Instead, companies like Aspect and Exxon Mobil are turning to the northern Kurdish region where the regional government passed its own hydrocarbon law in 2007. The Kurdistan Regional Government signs off on oil production in the region for itself.

Despite his entrepreneurial success, Cranberg does not advocate business-oriented principles for the UT System, he wrote in an email.

“The UT System has a variety of social goals that are not the same as for a business,” he said. “It would be more accurate to state that I have confidence in the power of the scientific method for informing the decision-making process in order to achieve goals. Of course, both business and higher education can use improvements in their decision-making processes.”

Gov. Rick Perry appointed Cranberg, a 20-year veteran of the oil business, to a six-year term on the UT System Board of Regents in February 2011.

Printed on Thursday, October 11, 2012 as: Iraq oil well may make UT regent a billionaire