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Iran’s oil sector given boost by new oil discovery

Iran’s oil sector received a boost of a new discovery at the Namavaran reservoir, which holds around 22 billion barrels of crude in place.

Oil minister Bijan Zanganeh said the find was the second largest in the country and could be the key to unlocking the OPEC member’s oil and gas potential, which remains stunted because of stringent US sanctions along with a lack of investment.

“With a 10% oil recovery rate, the exploitable oil will be 2.2 billion barrels,” he told journalists.

Zanganeh said the oil in place was very dense and heavy, with a specific gravity of over 20 API, which could make it technically difficult to extract.

The Namavaran oil field in the southwest province of Khuzestan which straddles the border with Iraq has 22 billion barrels of oil in place, and lies under previously discovered oil fields with 31.3 billion oil in place, Zanganeh clarified.

Zanganeh’s comments were a clarification of a statement by President Hassan Rouhani who said Sunday the whole reservoir contained 53 billion barrels of crude in place, including already discovered fields.

The reservoir overlaps previously discovered oil fields including Ab Teymour, Mansouri, Soosangerd, Darkhovin, Jofeir and Sepehr. “It is likely that the find expands towards southeast and southwest,” Zanganeh said.

The recoverable estimate of 2.2 billion barrels of oil is similar to Norway’s Johan Sverdrup which came online last month. The field holds 2.7 billion barrels of recoverable reserves, and is designed to produce 440,000 b/d in its first phase and 660,000 b/d by 2024.

Upstream focus

Iran’s upstream sector is in urgent need of rehabilitation due to ageing infrastructure. Expansion schemes have been delayed repeatedly due to Western sanctions and also due to internal bureaucracy.

Iran’s hopes to attract top international oil companies to its upstream sector to help develop its vast reserves of oil and gas have been dashed by stringent US sanctions.

Iran had proven oil reserves of 155.6 billion barrels at the end of 2018, or 9% of the world’s total, according to the BP Statistical Review of Energy 2019.

Iran’s production has fallen to its lowest level in more than three decades.

The country saw production slump to 2.23 million b/d in September, with a dramatic drop in crude exports somewhat offset by a significant build in storage, according to the Platts OPEC survey.

Iran produced 3.83 million b/d of crude in May 2018, the month the US withdrew from the nuclear deal and started to reimpose sanctions against the oil producer.

The exploration work on this field had been carried out by state-owned National Iranian Oil Company.

NIOC director of exploration Saleh Hendi told reporters oil upstream activity was focused on the Dasht Abadan or Dezful fields in southwest of the country along with Koppeh Dagh in the northeast.

It was the second discovery in the past month for Iran. In October, NIOC discovered a natural gas deposit in the southern province of Fars, holding as much as 19 Tcf. The reservoir, called Eram, also holds as much as 385 million barrels of condensates.

Iran shares ownership of the world’s largest natural gas deposit, South Pars and North Field in the Persian Gulf, with Qatar. While the field has helped Qatar to become the world’s largest liquid natural gas exporter, Iran has mostly used its part of the field for domestic consumption.
Source: Platts

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