Revenues from the export of oil and oil products are the main source of economic growth, foreign exchange earnings, and the formation of the revenue side of the state budget of Iran. 85% of foreign exchange earnings and 75% of rial income in Iran is directly or indirectly related to oil production.
According to explored reserves oil Iran ranks 4th in the world. The total reserves are 370 billion barrels. (50 billion tons). Proven recoverable reserves, according to various sources, range from 96% to 100 billion barrels. (13-13.4 billion tons). Of the officially confirmed oil reserves, 80% lie in the fields in the province of Khuzestan and in the offshore fields of the Persian Gulf.
Mining oil in Iran in 2001 was in the range from 3400 to 4100 thousand bar. per day. In total, 182 million tons were produced during the year. oil, of which 112 million tons. was exported. Due to the high level of world oil prices, foreign exchange earnings in the country during the review period from oil exports amounted to 3 billion dollars. exceeded the amount fixed in the state budget and amounted to 16 billion dollars.
Iran is a member of the Organization of the Petroleum Exporting Countries (OPEC) and, in terms of crude oil production within this organization, ranks second after Saudi Arabia, with a quota of 14.6% and in the total production of OPEC. Iran's share in world crude oil production is 5.7%.
Among world producers, it ranks 4th after Saudi Arabia, the USA and Russia. 87% of oil is produced on the mainland fields, the main of which are Gyachsaran, Bibi Khakime, Ahvaz field, Masjede Soleiman, Haftgel, Nafte Sefid, Aga-Jari (consists of Karanj and Marun fields) and Paren. 0.6 million barrels are produced at the shelf fields of Iran. per day. The cost of development and production of crude oil is 3-4 USD/bbl. In some mainland fields, these costs are much lower.
In 2001 Iran exceeded quotas oil production set by OPEC. According to OPEC decisions, Iran's quota in the oil production of the member countries of this Organization, which was up to Feb. 2001 3.916 Mb/d, from 1 Feb. amounted to 3.698 million barrels, from 1 April. – 3.552 million barrels, from 1 Sept. – 3.406 million b/d.
The production capacity of Iran's oil industry is 4 million bar. per day. The main buyers of Iranian oil remained the oil companies of Japan, South Korea, China, Italy, Germany, and India.
The government pays great attention to the further development of its oil industry. Exploration work is underway in various regions, especially in the south and southwest of the country. Since 1999 Iran is exploring for oil and gas in the north of the country and, in particular, on the shelf of the southern sector of the Caspian Sea.
Iranian Oil Minister B. Zangene said that in recent years, geological exploration for oil and gas has intensified in the country. So, in 1999-2001. the increase in explored oil reserves amounted to 50 billion barrels, while in 1979-998. this figure was only 10 billion bar. The increase in explored reserves of natural gas over the past two years amounted to 1.4 trillion cubic meters. B. Zangane noted that almost all oil has been explored in the southern regions of the country. Explored oil reserves are distributed by individual fields (in billion barrels): Azadegan - 25; Kushk - 11; Mansurabad - 4.5; South Parc - 6; Chachle - 1.
In 2001 Iranian media have reported that rich deposits of oil and natural gas have been discovered in the southern part of the Caspian Sea. The reserves of discovered fields are estimated by the Iranian National Oil Company (INOC) at 10 billion barrels. oil and 560 billion cubic meters. gas. Exploration of deposits was carried out on an area of 10 thousand square kilometers. within 18 months. The cost of production of one barrel of oil in this area may be 5-7 dollars. Geological exploration was carried out by the INOC with the participation of the British company Lasmo and the British-Dutch Royal Dutch Shell. The total reserves of oil and gas in the waters of the entire Caspian Sea are estimated at 30 billion bar. and 12 trillion cubic meters. A new oil field has been discovered in the coastal waters of Iran in the waters of the northern shallow part of the Persian Gulf (in the Abadan desert zone). This was stated in an interview to the national radio by the deputy head of the Iranian National Oil Company M. Mirmoezi. The oil reserves of the field are estimated at 26 billion barrels. M.Mirmoezi announced the discovery in the province of Khuzestan (in the Ramhormuz region) of a natural gas field, the volume of which is estimated at 40 billion cubic meters.
Production of petroleum products in Iran carried out at 9 refineries located in the cities of Abadan, Isfahan, Bandar Abbas, Arak, Tehran, Tabriz, Shiraz, Kermanshah and on Lavan Island. The total production capacity of Iranian refineries is 1.4 million bar. per day.
The products of processing crude oil supplied to Iranian refineries are: gasoline, kerosene, diesel fuel, fuel oil, motor oils, bitumen. Iranian refineries produce 40 mln.l. gasoline per day, which does not allow to fully meet the ever-growing demand for this fuel. Iran is forced to import significant quantities of gasoline. In 2001 Iran imported $1 billion worth of gasoline and other fuels.
Iran exports part of its oil products (kerosene, diesel fuel, fuel oil, bitumen).
The average growth in the consumption of petroleum products in the country is 6% per year. The Iranian leadership is taking steps to implement a program to expand the production of petroleum products at existing facilities and build new oil refineries with the involvement of the private sector.
In 2001 The Supreme Economic Council of the Islamic Republic of Iran has approved a list of development projects in the oil and gas and petrochemical industries. These include 19 unfinished openings in the field of oil refining, distribution and transportation of oil and oil products, including the modernization of the Abadan, Tehran, Isfahan, Arak, Tabriz, Shiraz and Kermaishah refineries, as well as the construction of oil storage facilities and oil pipelines.
Productivity of oil refineries Iranian factories, in thousand bar. per day: Abadan - 400; refinery in Bandar Abbas - 232; Tehran - 225; Nsfagansky - 265; Arak - 150; Tabriz - 112; Shirazek - 40; Kermanshah - 30; Lavansky - 30; total - 1484. According to E1A (Energy Information Administration).
Modernization of the country's largest Abadan refinery with a nominal capacity of 400 thousand bar is underway. per day. After the construction of additional shops, the production capacity of this refinery will increase to 500 thousand bar. per day.
The modernization of the Tavriz refinery has begun, which should be completed in 18 months. After the modernization HP3 will accept oil coming from the countries of Central Asia for processing. In order to reduce the level of environmental pollution, not fuel oil, but natural gas will be used as fuel for the operation of process units. It is planned to start production of lead-free gasoline. The share of refineries in the total production of petroleum products in the country is 8%.
Construction of a new refinery with a capacity of 165,000 barrels continues in the SEZ on the island of Qeshm. per day. Financing of the project worth 1.8 billion dollars. 70% provided by foreign, incl. Canadian, and 30% - Iranian investors from the non-state sector. Equipment for the enterprise will be purchased in Germany and Norway.
There are plans to build by the private sector 3 refineries in the northern provinces of the country of Mazanderan and Golestan for processing oil littoral states.
The production of petroleum products consumed by road transport (gasoline and diesel fuel) will increase due to the growth in the volume of road transport. The production of kerosene consumed in the domestic sector and fuel oil consumed in a number of energy facilities will decrease or remain at the same level due to plans to expand the gasification of the country.
Domestic consumption of petroleum products is wasteful. The main reason for the high level of consumption is the large state subsidies for the use of petroleum products and electricity (10 billion dollars a year). The government, which has become dependent on its social policy, does not dare to make a sharp decrease in the volume of subsidies in this area, preferring to carry out a gradual and moderate increase in prices for oil products and electricity.
The rapid growth in the consumption of petroleum products within the country and the desire Iran to maintain its share in the total oil production within the framework of the OPNK, which will constantly grow in physical volume (the demand for crude oil in the world markets will grow annually within 1.5 million barrels per day), requires urgent measures aimed at increasing level of crude oil production in Iran.
According to Iranian oil and gas leaders, increasing the country's oil production is a national necessity. The main tasks in the formation of a policy aimed at the development of the oil and gas industry are: the priority development of joint oil and gas fields with other countries and the preservation of Iran's quota in OPEC; attraction of investments for the development of oil and gas fields; attraction of advanced technologies for the development of oil and gas fields; maintaining the sovereignty of Iranian oil and gas fields; attracting the transit of Caspian hydrocarbons to world markets through the territory of Iran; expansion of natural gas production; expanding the use of gas as a fuel instead of other petroleum products.
The Iranian leadership is taking measures to structurally reform the country's oil industry. These measures include: decentralization of industry management; reforming the management system and improving the efficiency of departments; privatization of a number of structures and companies included in the system of the Ministry of Oil.
In order to improve the management of production enterprises, regional oil and gas companies have been created, and the status of companies under the management of the board of directors has been introduced at refineries. According to Minister of Oil B. Zangane, the creation of five regional companies will contribute to an increase in oil and gas production and an increase in revenue from the sale of these hydrocarbons.
For the first time in the post-revolutionary period, the government and parliament Iran decided to eliminate the state monopoly in the country's oil industry. Art. 34 of the draft law on the Third Five-Year Plan provides for the participation of private companies and capital in the processing, distribution of oil and oil products, as well as in providing the oil and gas sector with industrial equipment.
Ministry oil plans by the end of the five-year plan (2005) to transfer to the private and non-state sector 23 of its structural divisions and companies, primarily centers for the distribution of liquefied gas, structures involved in the processing, distribution and transportation of petroleum products, including such large companies as the National Iranian Drilling Company (NIDC), National Iranian Tanker Company (NITC). Privatization of NIDC due to opposition from a number of deputies of the Mejlis, employees of the company itself and the public of the province of Khuzestan, on the territory of which the company performs the bulk of the work, has been suspended for the time being. The leadership of the Ministry of Oil expects that with the privatization of a number of its structures and companies, the efficiency and profitability of these units will increase, the interest of foreign investors in cooperation with the private sector will increase, which will have a beneficial effect on the implementation of the oil and gas industry development program laid down in the Third Five-Year Plan.
The Ministry of Oil is developing projects to increase the production capacity of the industry for the long term, since in order for Iran to maintain its position in the group of leading oil-producing countries, it is necessary to increase oil production to 8 million barrels over the next two decades. per day, i.e. increase its production by 2 times. The implementation of such a program will require additional investments in this industry, at least $21 billion. At the current stage, Iran urgently needs 3 billion dollars. to expand existing production capacities and 2.5 billion dollars. to compensate for the decline in oil production from existing wells. In recent years, Iran has signed 12 major agreements with foreign companies to develop its oil and gas sector for $15 billion. The projects will be implemented with the involvement of domestic and foreign sources of financing, as well as foreign technologies. After the fulfillment of these contracts, the country will produce an additional 340,000 b/d of crude oil and 214 million cubic meters. gas per day.
However, the participation of foreign companies in Iranian oil and gas projects is restrained due to US sanctions against Iran and Libya under the D "Amato law. A number of large companies, including such as the Franco-Belgian Toalfina-Elf, the Anglo-Dutch Royal Latch Shedl, Italian ENI and its subsidiary Ajin, Malaysian Petronas, as well as several Russian companies led by Gazprom, are already participating in some Iranian oil and gas projects and competing in international tenders announced by Iran.
Representatives of American companies take part in international conferences and seminars on the problems of the oil and gas sector in Iran and the region. There is information about applications of these companies to participate in tenders for some projects, as observers in order to obtain information.
For the progressive development of the oil and gas industry in Iran, it needs an annual investment of at least 10 billion dollars.
The first batch of Iranian oil, free from sanctions, went on tankers to Europe. Four million barrels are intended for companies from France, Russia and Spain. This was stated by Iranian Deputy Oil Minister Rokneddin Javadi. In addition to tankers for Europe, Tehran has sold three more oil tankers to Asia, its traditional markets. The press reports that Iranian oil officials are willing to make small concessions on the price.
On February 14, Tehran announced the first batch of oil exported to Europe since the lifting of Western sanctions. Deputy Oil Minister Rokneddin Javadi told IRNA that the shipment of raw materials to Europe opened a "new chapter" in Iran's oil industry for the first time in 5 years. Several Western tankers with 4 million barrels of Iranian oil set off for the European continent, informs.
Half of this batch was purchased by the French concern Total, the rest of the oil is destined for two companies from Russia and Spain. According to Javadi, the Russian company will send the resulting oil to its refinery in Romania. The agreement with the French energy concern provides for daily deliveries of 160-180 thousand barrels.
Deutsche Welle also recalls that Tehran and Rome signed a memorandum of understanding on the same day to expand cooperation in the petrochemical industry. The total amount of the preliminary agreement of intent is one billion euros.
Iran is also negotiating with the German concern BASF. The latter intends to invest 4 billion euros in Iran's petrochemical industry.
In addition to oil for Europe, Iran sold three tankers of raw materials to Asia, according to Reuters.
These markets are traditional for Iran, and it is there, the Wall Street Journal points out, that Tehran plans to regain its share. According to the publication, in order to successfully compete with suppliers from Russia and other countries, Iran has already reduced prices for refineries on the Mediterranean coast. Earlier, the same "Wall Street Journal" wrote that Iranian officials are ready to make small concessions on the price. They try not to accept big discounts, but are looking for other ways to pay for supplies: for example, in exchange for European goods or investments in foreign refineries in order to obtain more attractive conditions in contracts for the sale of raw materials.
The publication also recalls that the prospect of resuming the export of Iranian oil over the past year has twice reduced oil prices: in July 2015, after Iran's agreement with the "six" to terminate the nuclear program, and in January 2016, when market participants realized the imminent lifting of sanctions with IRI.
Recall, the United States and the European Union announced the lifting of sanctions against Iran a month ago. The ban on oil supplies to European countries was also lifted.
At the same time, Tehran announced its raw material plans: to return to the previous volumes of supplies of "black gold" to the world market - up to 2 million barrels of crude oil per day. Iranian oil officials are allotting about half a year to implement this plan. Experts do not particularly believe the Iranians and believe that the state will need up to a year and a half to increase production: investors are needed, new infrastructure is needed.
While Western sanctions were in effect, Iran was selling about 1 million barrels of oil per day to China, India, Turkey, Japan, South Korea, that is, to Asian countries.
Prior to Iran's return to the Western oil market, analysts issued a variety of forecasts. The majority was inclined to the inevitable price reduction - to 20 and even to 10 dollars per barrel. In addition to Iran, the price will be affected by an excess of raw materials on the market (overstocking), problems in the Chinese economy and the reluctance of OPEC to cut production volumes so far.
However, the latter is now in question.
Last Friday, oil rose in price by more than 10% only due to hopes for a decrease in production by OPEC countries. The Nigerian oil minister has said bluntly that cartel members are increasingly inclined to act to support prices and that he will negotiate with colleagues from Saudi Arabia and Qatar on this issue.
Iran is unlikely to have a significant impact on the world market, as it currently exports 1.3 million bpd and will be producing 1.5 million bpd by the start of the new year (starting in Iran on March 20). This was stated by the vice-president of the country Eshak Jahangiri.
Quotes the statement of the Minister of Energy of the United Arab Emirates. He also said that OPEC members are ready to cooperate on a possible reduction in oil production.
According to some analysts, some investors continue to hope for a reduction in production by the main suppliers of "black gold" against the backdrop of an oversupply of raw materials on the market.
“As for Saudi Arabia and Iran, they are not interested in cutting right now, but at the same time they do not want prices to continue to decrease, since at $25 a barrel they will not be able to make a profit,” MarketWatch said. Gordon Kwan, Head of Commodity Market Research at Nomura Holdings.
However, even with a likely cut in production, there remains one more deterrent to rising oil prices: China.
According to the report of the National Bureau of Statistics of the People's Republic of China, which is quoted by RIA "", the export of goods from the Middle Kingdom in January 2016 decreased in annual terms by 11.2%, while the forecast for a reduction of only 1.8%. Imports decreased by 18.8%, while analysts had expected a decline of 3.6%.
Earlier in the press flashed surprisingly optimistic forecasts for the oil market.
For example, at the end of January, analysts at the British bank Standard Chartered predicted an increase in oil prices this year to $75 per barrel. I wrote about this with reference to MarketWatch.
The chief economist of the bank, Marios Marazeftis, said that such a conclusion was made by experts when considering the dynamics of supply and demand. Marazeftis believes that supplies could fall sharply in the second half of the year. The current surplus is based on a surplus of only about 1 million barrels per day. Standard Chartered expects that by the fourth quarter of the year the price of a barrel of oil will rise to 70-75 dollars. At the same time, the forecast also takes into account the return to the Iranian market.
As for Russia, in the late evening of February 15, information appeared in the Russian media about the upcoming negotiations between Moscow and Riyadh on the oil issue. They will be unofficial and supposedly will be held in Doha (the capital of Qatar).
Bloomberg reported on informal talks between Russian Energy Minister Alexander Novak and his Saudi counterpart Ali Al-Naimi. The source of the publication, notes, could not specify what would be the main topic of the conversation. It is only known that Eulogio del Pino, the representative of Venezuela, should also join the meeting.
Bloomberg has not received confirmation of the meeting either from representatives of the Russian Ministry of Energy or the Ministry of Petroleum and Mineral Resources of Saudi Arabia.
It is unlikely, let's add on our own behalf, that Russia will begin to reduce the volume of production of "black gold". First, there are Western sanctions, and the reduction in supplies to the foreign market will lead to an even greater federal budget deficit, already suffering from a recession in the economy and cheap oil. Secondly, the market share of Russia can be occupied by competing countries, which means even more problems for the budget. Thirdly, earlier Russia at low prices did not reduce, but, on the contrary, increased production. This is evidenced by open official statistics. For example, in 2009, when export prices for Russian oil fell sharply - from an average annual value of $90.68 per barrel to $55.61 per barrel - Russia's crude oil exports did not fall, but increased: from 243, 1 million tons to 247.5 million tons (data from the Federal Customs Service of Russia and Rosstat, summarized). Growth continued in the next year (250.7 million tons).
In general, oil exports under Putin grew quite significantly: from 144.4 million tons in 2000 to 223.4 million tons in 2014. Of course, Moscow does not intend to lose its market share in the global oil market. Especially in times of carefully extended sanctions by the West.
Federal budget revenues from the export of mineral resources and in the form of taxes, fees and regular payments for the use of natural resources range from 40-odd percent to 50-odd percent (according to various data and in different years, see, for example,). The dependence of the budget on trade in crude oil and gas is great, and it would be naive to deny it.
A. V. Rogov in the article “Dependence of Russian budget revenues on the export of the oil and gas sector” in the journal cites the following data: the federal budget for 2013, which amounted to 13,020 billion rubles, consisted of 5,357 billion rubles (or 41%) of income received from the sale of mineral resources. If we consider the entire budget of the Russian Federation, that is, taking into account the federal and consolidated, then the share of income from the oil and gas sector in it will be 25.35%, the analyst continues. With a simple calculation, it becomes clear that at least every fourth ruble goes to the treasury of the Russian Federation precisely through the sale of hydrocarbons. “This situation cannot be called encouraging, and dependence on the oil and gas sector is more than felt, this is especially noticeable at the time of a sharp change in the price of oil on the world market,” the author concludes.
At present, we add in conclusion, oil prices are rising. Dynamics of prices for Brent oil in the growth chart: if on February 10 the price per day was $30.92 per barrel, then on February 15 it was already $33.98, and the next day it quickly went up. On the morning of February 16, it rose to $34.72 per barrel.
Thus, Iranian deliveries have hardly affected the market situation and so far have not infringed upon Russia's raw material interests. The world share of Iran in the oil trade is too small to have a significant impact on exchange pricing.
The July offensive of the exchange "bears" on oil prices took place under the loud statements of Iranian ministers, who promised to increase oil production by 1 million barrels per day after the lifting of the oil embargo. These messages immediately aroused a certain distrust in me. But first, a little history.
The US and the EU imposed a ban on oil imports from Iran from July 1, 2012. Some countries, in particular the UK, have stipulated exceptions for themselves (reduction of purchases instead of their complete cessation). For Iran, this was not a disaster at all. The share of deliveries to the EU was about 20% of its oil exports, it was not difficult to find other buyers for it. But after 9 months, the United States excluded 10 EU countries and Japan from the list of those that joined the embargo. Iran, however, did not resume deliveries, but, on the contrary, announced that it itself was imposing an embargo on oil exports to the EU. Thus, for the past three years, virtually no one has prevented Iran from selling its oil for export.
Far more than the embargo, Iran's oil production has been affected by economic sanctions. Iranian assets in Western banks were frozen, investment and lending, insurance of tanker transportation, technology transfer, supply of components and, in general, any work of Western companies there was prohibited. Even before the sanctions, Iran tried to attract Chinese and Russian contractors as investors, but contracts were difficult to conclude, and drilling was even more difficult. Under these conditions, oil production in Iran actually decreased by 0.7 million barrels per day (see Fig. 1).
An overview map of Iranian oil is shown in fig. 2, and the table shows the initial reserves of some large deposits.
Iranian deposits were formed as a result of powerful tectonic processes. Oil is contained mainly in the cracks of rocks. Almost all of them contain gas or gas condensate caps. This significantly complicates production, since forcing extractions can lead to gas breakthrough to the bottom of the well, in which case the oil flow is many times reduced. That is why the oil recovery coefficients of Iranian fields are relatively small, in the range of 20-35%.
The largest field Agadjari opened in 1936 and is now 82% depleted. Its dimensions are 60x6 km, oil reservoirs lie at depths of 1400-2600 m. In 1978, only 60 wells worked here, which in total produced 31.4 million tons of oil per year, the average well flow rate was a huge value of 1430 tons / day. More recent information is not available in available sources.
Maroon field It was put into operation in 1965. Its dimensions are 50x7 km, oil reservoirs occur at depths of 2700-3350 m. In 1985, 55 wells were operated at the field, and the cumulative production amounted to 670 million tons. From recent reports (2008) it follows that there are also oil traps around Maroun, but well productivity is about 10 times lower there.
Things are more complicated with recently discovered deposits. Azadegan officially commissioned in 2007 and designed for a design capacity of 260,000 barrels per day. So far, the achieved level is 5 times lower. With such withdrawals, the declared reserves (1.2 billion tons) will have to be mined for 480 years.
Yadavaran field According to Iranian experts, it has a potential of 300-400 thousand barrels per day. However, current production is 25 thousand barrels per day. Chinese Sinopec plans to quadruple it in 2018 alone.
Information about the offshore field Firdous limited to a few messages. It looks like there is a gas reservoir there. There is no serious data about the oil reservoir, only a declaration. The largest offshore field is Abuzar, and in general, about 700 thousand barrels per day are produced on the shelf.
As you can see, Iran does not spoil us with information about the latest discoveries. Therefore, we have to focus on meager facts: data on production, more precisely, on its fall.
What prevents Iran, with such large reserves (21.7 billion tons), from stabilizing and even increasing production? There are three possible groups of reasons.
Geological problems. Declared oil reserves may be significantly overestimated. This trend has grown strongly in recent years. It is especially useful for OPEC members to overestimate reserves, because in proportion to them they set production quotas for themselves. But this is hardly the decisive reason. Even if one mentally reduces Iran's total reserves by half (to 11 billion tons), it is quite possible to select 5 million barrels per day from them.
Technical and economic problems. They are more difficult. The main one is generated by the gas contained in the gas caps. Firstly, it does not allow the valves to be opened to the fullest, because then the wells will gush with one gas. Secondly, even with careful selection, there is still a lot of gas, and there is simply nowhere to put it. About 40 years ago, when Western companies were producing in Iran, more than 70% of the gas was simply flared. The new government gradually put a stop to this outrage, and now Iran annually consumes 170 billion m3, and pumps another 32 billion m3 of gas into oil reservoirs, as if to increase oil recovery. Iran also has huge gas reserves in the Persian Gulf; if he had the opportunity to pump gas through pipelines, he would immediately solve a lot of problems. But in the western direction there are hostilities, and in the east Pakistan and India have low prices due to the poverty of their peoples.
For injection of gas into the reservoir, its preliminary treatment and compressor capacities are required; All this leads to the complication and rise in the cost of crafts. Iran claims that it manufactures 70% of oil and 90% of gas distribution equipment at its facilities, but only parts for compressors and turbines are produced there. The situation is aggravated by a chronic shortage of money: with annual revenues from oil exports of $55-63 billion, the Iranians themselves estimate the need for investment at $150 billion.
Partnership problems. In my opinion, they are the most significant. The Iranian constitution prohibits the transfer of subsoil to private individuals and foreign companies; production sharing agreements are also not allowed . The main and only oil producer is the National Iranian Oil Company NIOC, and it can attract investors to develop fields. The investor is obliged to sell all the oil produced to the state, which reimburses him for past costs with an agreed percentage of profit (12-17%). This is reminiscent of our work contract, when the contractor performs the work at his own peril and risk, at his own expense, and the calculation is made according to the final result. The state also imposes other conditions on the investor, in particular, more than half of the deliveries must be made by Iranian enterprises.
This system is fraught with great risk for the investor.. The development of large oil blocks requires 7-10 years, and all these years he is obliged to invest his own funds. It often happens that the deposit is poorly explored; in this case, “dry” wells and corresponding losses appear. A delay in the implementation of the work schedule threatens the investor with a break in the contract, this is exactly what happened with Gazprom at the Bushgan, Kaki, Kuhmond fields, with Tatneft at the Zagheh field and Chinese CNPC at South Pars and South Azadegan. At the last field, CNPC was able to drill only 7 wells out of a planned 185 wells in three years. Earlier, Japanese and Malaysian companies also left other projects.
Realizing that the current tough conditions are unattractive for investors, Iran last year prepared a different scheme of interaction, the so-called integrated oil contract. It provides for the participation of the investor in the exploration and development of the deposit for a period of up to 25 years and the share distribution of income similar to the division of production. His further fate is still unknown.
Summary. Due to the size of its reserves, Iran has the potential to increase oil production to 5-6 million barrels per day, and possibly even higher. However, this will require large investments and technical re-equipment of the industry. Neither one nor the other will appear in the country tomorrow. Therefore, I do not expect a radical increase in oil production in Iran over the next 2-3 years.
A new large oil field has been discovered in Iran with reserves of 15 billion barrels (about 2 billion tons). This was announced by the managing director of the National Iranian Oil Company (NIOC) Ali Kardor.
He clarified that at least 2 billion barrels. out of 15 billion, these are guaranteed recoverable reserves. But their development requires huge investments and renewal of technological capacities.
Now the Islamic Republic of Iran produces about 4 million barrels of oil per day, and Iran reached these figures only by the end of 2016. Previously, Iran was recovering from Western sanctions, which were lifted only in mid-January last year. Sanctions, among other things, limited the export of local oil, as a result of which production was reduced in Iran. According to OPEC, in January 2016, Iran produced 2.88 million barrels per day.
“According to the plans of the Iranian government, by 2025 the country's share in the structure of world oil production will be 7%,” says a recently published analytical note prepared by experts from Frost & Sullivan. - Iran's new energy strategy provides for an increase in daily oil production to 6 million barrels by the end of 2020. At the same time, the oil recovery factor (ORF) will increase by 0.2% per year, mainly due to the re-injection of water and gas into oil-bearing formations.”
Currently, the level of world oil prices is supported by an agreement signed at the end of last year by OPEC countries and a number of other producers to limit production. The agreement was concluded for the first half of 2017 with the possibility of extension for another six months, but recently the leaders of the oil market are increasingly saying that they are not going to prolong it.
Iran was initially effectively excluded from the agreement as a country affected by the sanctions.
The new field can help Iran fulfill its plans to increase production, which in the future may have an impact on the world market. New volumes of oil will put pressure on quotes.
“It all depends on how laborious the development of a new field will be,” Artem Deev, lead analyst at Amarkets, points out. “But even without taking this into account, it would be wrong to expect that the development of this field will somehow affect the world market.”
The fact is that oil from this field, according to Deev, will not enter the markets in the near future, since development is a rather capital-intensive and lengthy process.
“Moreover, Iran may have problems with oil production at a new field, since the country is seriously lagging behind in terms of technology in this industry and US sanctions prevent the introduction of new technologies to Iran,” the expert says.
America introduced new sanctions against Iran last week in response to a ballistic missile test conducted by Tehran. US President Donald Trump has called Iran "terrorist state number one." There are 13 individuals and 12 companies based in Iran, Lebanon, China and the UAE currently under sanctions, but this is probably not a definitive list.
It has already been reported that new restrictive measures may be introduced by the US Congress. In parallel, Israel called on "responsible" nations to heed the US position.
On Tuesday, Israeli Prime Minister Benjamin Netanyahu spoke about this with his British counterpart Theresa May, saying that Iran threatens "Europe, the West, the world."
Iran, for its part, says that the US attitude does not frighten it, but because of the sanctions, American companies will not be able to participate in tenders for the development of Iranian hydrocarbon reserves. Iranian Deputy Oil Minister for International and Commercial Affairs Amir Hossein Zamaninia spoke about this on Monday. Earlier, Iran invited foreign investors to cooperate on 70 oil and gas projects.
But even if technological difficulties now do prevent Iran from developing large new reserves, the Iranians may well cope with this problem in the near future. F&S experts point out in their material that the most important task of Iran's energy strategy is to reduce the share of imports of equipment and technologies necessary for the development of oil and gas fields.
Over the past decade, Iran has made massive investments in the R&D sector, which has contributed to the creation and mass production of a number of key technologies by Iranian companies.
“Despite the fact that the cost of locally produced equipment remains 30-70% higher than foreign analogues and often loses much in quality, today Iran is able to produce from 60 to 80% of all necessary oil and gas technologies on its own,” F&S experts say.
Moreover, in some segments (for example, in the field of construction of drilling rigs), the level of localization reaches 100%.
F&S analyst Dmitry Raspopov told Gazeta.Ru that the field is potentially capable of producing 150-200 thousand barrels per day (at the start of commercial production, based on the volume of recoverable reserves of 2 billion barrels).
“In theory, new volumes put downward pressure on prices,” the expert comments. — On the other hand, new deposits are discovered every year, not only in Iran. Therefore, an increase in reserves in Iran is unlikely to have any effect on world prices in the coming years, especially since Iran, with the current level of technology and investment, is close to the production ceiling.”
The first scientific report on oil seeps in southwestern Iran was made by Loftus in 1855. In 1872, Julius de Ruiter, the founder of the telegraph agency, received a concession from the Iranian government to search for certain minerals, including oil. However, this concession was canceled a year later. A few years later, Reuter again tried to acquire a concession in Iran, which he achieved in 1889, thus obtaining the right to establish a bank. Oil exploration was carried out by Pershnbank Mining Rights Corporation (Anglo-German capital). In three years (1891-1893), two wells were drilled in Daleki, northeast of Bushehr, with a depth of over 240 meters, and one well on the island of Qeshm, with a depth of up to 210 meters. The wells turned out to be unproductive, and in 1894 the company was liquidated.
In 1901, the Englishman William Knox, who made his fortune in gold mining in Australia, received an oil concession over the entire territory of Iran, with the exception of five northern provinces, and in 1902 drilling began in Shah-i-Surkh. Some signs of oil were found here, but no commercial inflows were received. In 1906, two exploratory wells were drilled at Mamatein, near Ram-Hormuz, but the drilling did not give positive results, and in 1907 exploration was transferred to the Mesjid-i-Suleiman area. On May 26, 1908, oil was encountered in well No. 1 at a depth of 354 meters, and 10 days later, at a depth of 303 meters, oil and gas were obtained in well No. 2. Further events unfolded quickly. In 1909-1910. the laying of an oil pipeline from Mesjid-i-Suleiman to Abadan and the construction of an oil refinery in Abadan began, which was put into operation in 1913.
Knox's capital proved insufficient to carry out all the necessary work. Additional funds were provided by the Burma Oil Company and some private individuals, leading to the formation of the Anglo Pursue Oil Company. In May 1914, at the suggestion of Winston Churchill, then Minister of the Navy, the British government acquired a significant part of the shares of this company to provide oil to the navy. The outbreak of war with Turkey in November 1914 endangered the oil fields of Iran, in connection with which British troops were landed there. The Mesopotamian campaign followed, dragging on until 1918, in which successes alternated with defeats.
After 1918, oil production at the Mesjid-i-Suleiman field increased continuously, and the productivity of the refinery in Abadan was increased. In 1928, the Haft-Kel field gave the first oil, in 1941 - Kah-Saran, in 1944 - Aga-Jari, in 1945 - Sources of white oil, and in 1948 - Lali. The average daily oil production in Iran in 1948 was 518 thousand barrels, and the total production from 1913 to the end of 1948 amounted to 1938 million barrels. There is a small oil refinery at Mesjid-i-Suleiman, which supplies gasoline to the transport of the oil fields.
Features of Iranian oil fields
Iranian oil fields are confined to large simple anticlines, thick (300-meter) Asmari limestones (Lower Miocene - Oligocene) serve as reservoirs. The uplifts are well defined, the southwestern limbs are steep and in some cases almost vertical, as a result of which the limestones are marked by significant fracturing. Their average porosity is low, therefore, in order to become productive, a well must encounter a fractured zone. Most natural reservoirs communicate with each other so freely that at a distance of 25-32 km one can detect the same pressure drop that occurs during the operation of the field. The wells are separated from each other at a distance of 1.5-3 km, and the progress of the gas-oil and water-oil sections is constantly monitored through monitoring wells.
The Asmari limestones are overlain by anhydrite-salty-argillaceous strata belonging to the Lower Fars and forming an impermeable seal. Oil and gas seeps mark shallower oil accumulations for which the ratio of overburden pressure to the pressure of the fluid contained in the underground reservoir proved insufficient to seal the deposit. The plasticity of the salt-bearing strata caused an extremely sharp unconformity occurrence of the upper strata and the underlying massive Asmari limestones, so that in some cases the synclines composed of the upper strata are located above the buried anticlines. To recognize the structure, seismic exploration by the method of refracted waves was used here.
Naft-i-Shah oil field
Naft-i-Shah is a small field, located away from the main group of Iranian oil fields. It is located on the Iran-Iraq border, northeast of Baghdad (the part of the anticline located within Iraq is called Naft-Khane). A 3-inch oil pipeline links the Naft-i-Shah field with an oil refinery in Kermanshah, which produces oil products for the local market in this region of Iran. In 1947, the daily production of Naft-i-Shah averaged 2,800 barrels.
The capacity of the Abadan refinery is 495,000 barrels of crude oil per day. The refinery produces a wide range of petroleum products. The specific gravity of oil ranges from 0.835 (Mesjid-i-Suleiman field) to 0.865 (Kah-Saran field), and the sulfur content ranges from 1 to 2%. The oil has a paraffin-naphthenic base with a significant content of asphalt. During the Second World War, when Burma and Indonesia were occupied by the Japanese, the importance of the Abadan refinery increased enormously, which, in particular, was expressed in an increase in the production of aviation gasoline here, which reached 20,000 barrels per day in 1945.
Oil fields of Southwestern Iran
From the fields of southwestern Iran, oil is supplied through an oil pipeline to Abadan, as well as to the oil loading port of Bender-Mashura. The throughput capacity of oil pipelines is about 650,000 barrels per day. Mesjid-i-Suleiman, Lali, Haft-Kel and Naft-Safid are connected to Abadan by six 10-inch oil pipelines, and Kah-Saran by 12-inch; The Agha-Jari oilfield is connected with Abadan by a 12-inch oil pipeline and with Bender-Mashur by 12-inch and 22-inch oil pipelines. Due to the elevated position of the Kah-Saran and Aga-Jari fields, oil from them is supplied to the final points by gravity, however, the construction of pumping stations was required to transfer oil from other fields. There are oil refineries at Mesjid-i-Suleiman. Small oil refineries have been built in some fields to meet the local demand for fuel. Abadan's oil storage facilities, capable of holding some 800,000 barrels of crude oil, are usually half full.
The initial concession received by d'Arcy covered an area of 1245 thousand square meters. km, only five northern provinces remained outside the concession:
- Iranian Azerbaijan,
- Gilan,
- Mazanderan,
- Asterabad,
- Khorasan.
The concession agreement was concluded for 60 years beginning in 1901, and deductions to Iran were set at 16% of net profit. After commercial oil production began, disagreements arose between the Iranian government and the company on the definition of "net profit". The Iranian government was dissatisfied with fluctuations in the size of the annual deductions, which depended on the proceeds from the sold oil, and, consequently, on world market prices. Negotiations on the conclusion of a new agreement were quite successful until, in 1932, the Iranian government unilaterally denounced the concession agreement. The immediate cause of this act was the sudden drop in 1931 in the size of deductions, which was a consequence of the world crisis and the sharp fall in prices associated with it. The concession dispute was referred to the League of Nations in Geneva, and some time later an acceptable agreement was reached between the company and the Iranian government. A new concession agreement was concluded, according to which, in addition to fixed concession payments (4 shillings per ton of oil, and the value of a shilling was determined on the basis of an agreed ratio of it to gold), the Iranian government received a certain share in the company's profits, to be distributed after payment to shareholders 5 % dividend. A new concession agreement was signed in 1933 for 60 years. The concession area was reduced to 260 thousand square meters. km.
In 1937, the Emirates Oil Company, a subsidiary of the Seaboard Oil Company of Delaware, received oil concessions in northeastern and eastern Iran, and extensive exploration work was carried out there over the next two years. Subsequently, the concession was abandoned, as the company, part of the shares of which was acquired by Caltex, failed to find such oil deposits that would justify opening a development in such unfavorable geographical conditions. The results of geological work in eastern Iran are described in detail by F. Clapp.
In 1943 and 1944 British and American companies attempted to acquire concessions in central, eastern and southeastern Iran. The oil reserves of northern Iran are poorly explored. There are many signs of the presence of oil here, although geologically this area has almost nothing in common with the oil-bearing zone of southwestern Iran.
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