International sanctions and an unfavorable investment climate continue to limit Iran's development of its considerable oil and gas resources, the US Energy Information Administration said in a country analysis on Nov. 21.
EIA cited OGJ estimates placing the country's oil reserves at 137 billion bbl as of Jan. 1, 2011, making it fourth worldwide behind Saudi Arabia, Venezuela, and Canada. Iran's estimated 1,046 tcf of gas reserves at that time, meanwhile, were second only to Russia's estimated 1,680 tcf, it added.
EIA said Iran has 40 producing oil fields (27 onshore and 13 offshore), with onshore fields representing 71% of its total reserves. Of these onshore reserves, 85% are in the southwestern Khuzestan basin near Iran's border with Iraq, it noted.
Iran's crude is generally medium-grade, with a 28-35° API gravity range, according to the analysis. But it said that the country's production capacity continues to drop because its fields have a relatively high depletion rate (8-13%) coupled with an already low recovery rate (20-30%).
Sanctions and an adverse financial environment have kept necessary investments to halt this decline from being made, EIA said.
"There are few upstream oil projects in development, and those that are proceeding have been slowed by companies pulling out expertise, technology, and funding in the wake of various sanctions," it said. "The most promising prospects for a boost in production capacity come from two specific projects: Azadegan and Yadavaran. Other current oil projects include Jofeir, Resalat, and Forouzan, all of which have been significantly delayed due to sanctions."
Gas reserves profile
Iran's gas reserves, by contrast, are predominantly offshore, although significant onshore production is associated with oil production, EIA said.
More than two-thirds are in nonassociated fields, and are just now beginning to be developed, it continued. "The giant South Pars gas field, only a portion of which is in Iranian territory, comprises over 47% of total reserves," it said. North Pars, Kish, Kangan-Nar, Golshan, Ferdowsi, and other large gas fields contribute to potential production growth, the analysis said.
It said Iran's gas production has increased more than 550% in the past 2 decades, and consumption has kept pace. Exports likely will be limited because of rising domestic demand, particularly for enhanced oil recovery, it said.
The country has imported gas from Turkmenistan since 1997, and exports gas to Turkey and Armenia, EIA said. "Future pipeline projects include the Iran-UAE pipeline, Iran-Pakistan pipeline, and Iran-Europe gas export project," it indicated.
Iran and Syria have also discussed building a gas pipeline linking their two countries, but Syrian unrest makes the project look increasingly unlikely, EIA said.
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