An oil crisis is likely within the next three years, the managing director of AIM-listed exploration company Petrel Resources has said.

Mr David Horgan said oil markets face increasing consumption at a time of ever-reducing oil finds.

He said the situation had re-focused attention on the Middle East.

Within the Middle East, he said, Iraq possibly held the largest oil reserves. The fact that it had such a difficult relationship with the US meant there were opportunities for small non-US oil companies such as Petrel.

"For the long term, it's a great fit for an Irish junior."

The company yesterday released accounts showing a loss for the year to December 31st, 2001, of €276,821.

In a statement, the chairman, Dr John Teeling, said Petrel intended to continue its efforts in Iraq but was also looking at alternatives in Arabic-speaking areas.