Iran lawmaker says Arab countries ‘steal’ from shared oil, gas fields

Is anyone surprised of this news? In countries when they just a couple of weeks ago beheaded a woman for being a witch?! there is no expectation of following international laws and business practices.


London (Platts)–22Dec2011/829 am EST/1329 GMT

A prominent member of Iran’s parliament has accused Arab countries of colluding to exploit more than equitable volumes of oil and gas from fields shared with Iran, the official IRNA news agency reported Wednesday.

“The Arabs have created an unwritten accord to use more of [the reserves in] shared oil and gas fields than Iran,” Emad Hosseini, spokesman for the parliament’s energy committee, was quoted as saying.

Hosseini specifically named Saudi Arabia, saying the kingdom was taking advantage of Iran through “illegal” exploitation of the disputed Arash gas field in the northern Persian Gulf.

Earlier in 2011, Saudi Arabia and Kuwait reached an agreement on joint exploitation of the giant field containing an estimated 20 Tcf of gas, which they call Dorra. In early December, the two Arab states announced they would accelerate plans to develop the field because both countries needed the gas.

Iran at the same time unilaterally announced plans to drill in the field, but has yet to do so.

Iran says that roughly 5% of the gas field lies beneath its territorial waters and has called for all three states to share the reserves.

Saudi Arabia and Kuwait reject this.

“Unfortunately, we have problems in using all shared oil and gas fields with Arabs, and the Arash gas field is only one example,” Hosseini said.

He said that Gulf Arab states sharing maritime borders with Iran collaborated on exploiting shared fields at Iran’s expense.

“Sometimes Saudi Arabia helps Kuwait to extract more oil and gas in the shared fields. Sometimes, Kuwait helps the United Arab Emirates and sometimes the United Arab Emirates helps Oman,” Hosseini said.

Depending on local geology, it is sometimes possible for oil and gas reserves to migrate from one end of a reservoir to the other if the pool is exploited unevenly. However, this does not happen with every field, including some in the Gulf with complex geology that keeps local pockets of oil and gas in place.

The enormous shared offshore gas field known as North Field in Qatar and South Pars in Iran is understood by Arab and western geologists to be one such field. But Iran, which has so far been unable to conduct its own detailed reservoir studies of shared Persian Gulf fields, is unconvinced.

“Qatar exploits many times more than Iran from the shared gas field and has started its exploitation several years earlier than Iran. There should be a way to solve this problem,” Hosseini said.

Qatar has placed a moratorium on further development of North Field reserves pending the completion of a reservoir study at an unspecified time. The emirate’s industry and energy minister, Mohammed al-Sada, said in early December that he had no current plan to lift the moratorium. Hosseini said Iran’s oil sector has problems with management and authority and also faces challenges to investment. He cited these problems as reasons for Iran failing to keep pace with its Arab neighbors in exploiting Persian Gulf oil and gas reserves.

Iran shares at least 15 oil and gas fields with Arab states including Iraq, Kuwait, Oman, Qatar, Saudi Arabia and the UAE. Some of those fields straddle or lie close to disputed maritime border.

Forouzan (also called Marjan), Farzad A and B (also called Farsi A and B or Al-Hasabeh) are shared with Saudi Arabia.

Reshadat-Resalat is located very close to Iran’s maritime border with Qatar.

The Hengam oil field is shared with Oman.

Tehran has estimated that development of the shared fields will require $67 billion of investment over five years.

In late November, Iranian oil minister Rostam Ghasemi unveiled plans to award one contract every one to two weeks for the development of shared fields. He said the contracts would go to domestic contractors and investors.

However, no such contracts have yet been signed.

Hosseini’s criticisms are a sign of mounting tension between Iran and some Gulf Arab states, particularly Saudi Arabia, which share Western governments’ misgivings about Tehran’s nuclear aspirations.

The Iranian parliamentary energy spokesman’s comments come within days of a summit of the six Arab states comprising the Gulf Co-operative Council at which Saudi Arabia’s King Abdullah called for Tehran to stop “meddling” in GCC affairs.

–Aresu Eqbali, [email protected]

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