Tag Archives: News

How Iran could double its oil output

 

As Iran continues to grapple with the West over its nuclear ambitions, experts say the nation could double its already sizable oil output if sanctions were lifted to allow foreign investment into its oil industry.
Iran currently produces around 3.4 million barrels of oil a day, according to the U.S. Energy Information Administration. That makes it the world’s sixth-largest oil producer.

But sanctions were tightened after Iran refused to grant international inspectors full access to its nuclear facilities.
Iran — a signatory to the Nuclear Non-Proliferation Treaty — says its nuclear program is for peaceful purposes, but many suspect it’s intended to produce a weapon.
If the current sanctions were lifted to allow foreign capital and knowledge into Iran, the country could boost oil production to 6 or 7 million barrels a day.
“Iran could double its oil production if the right investments are made,” said Nansen Saleri, a Turkish-born former head of oil field management for Saudi Aramco who now runs the Houston-based oil consultancy Quantum Reservoir Impact. But the current regime has to fall, which Saleri says, “is just a matter of time.”
Saleri’s view of impending regime change there may be optimistic. Most analysts say Iran’s government is in no real imminent danger.
But his extensive knowledge and contacts in the region make him well placed to evaluate Iran’s oil assets. And he’s not alone in his opinion.
“The discoveries there have been huge,” said Manouchehr Takin, an analyst at the Center for Global Energy Studies in London who worked in Iran’s oil industry before the 1979 revolution. “Billions of barrels have been added in the last few years.”
U.S. tightens oil sanctions on Iran
Most of these new discoveries are close to Iran’s existing oil fields on the western side of the country, near the Iraq border.
One of the biggest new fields is known as Azadegan. It’s thought to contain 5 to 6 billion barrels of recoverable oil — more than twice what Alaska’s North Slope was originally thought to contain.
The field was slated to be developed by a Japanese company until recent sanctions forced the Japanese out.
Irans oil riches: At 137 billion barrels, Iran has the world’s fourth largest supply of proven oil reserves — more than twice the size of Russia’s. Yet Russia produces around 10 million barrels a day, nearly three time as much as Iran.

The problem with Iran is that much of its oil equipment is old, and drilling new wells has been slow, due to years of sanctions and underinvestment.
What’s needed is more drilling, pipelines, compressors, and a variety of other equipment. Also needed is the money to buy it, and the expertise to operate it most effectively.
“They could certainly produce more than they do now, said Bob Tippee, editor of the Oil and Gas Journal. “But they need international partners to bring money and know-how.”
Any of the big oil firms would jump at the chance to invest in Iran — Exxon Mobil (XOM, Fortune 500), BP (BP), Royal Dutch Shell (RDSA), as well as the companies that specialize in oil field optimization like Halliburton (HAL, Fortune 500) and Schlumberger (SLB).
The problem is western sanctions prevent these companies from investing in Iran.
As long as the country remains locked in a heated dispute with the West over its nuclear program, further investment seems unlikely.
Not everyone agrees that Iran could boost its output, though, even if the sanctions were lifted.
All of Iran’s fields have now been identified, said Fereidun Fesharaki, a former energy advisor to Iran’s prime minister before the revolution who now heads the consultancy Facts Global Energy. Plus, Iran is seeing big declines in its current oil field production due to natural forces.
“In the best circumstances, Iran cannot increase their production above 4 million” barrels per day, said Fesharaki. Anyone who thinks otherwise is “smoking something.”

Iran to develop $450M gas pipeline to Iraq

Iran will independently develop a $450 million gas pipeline to Iraq with a daily capacity of 25 million cubic meters of natural gas, said the managing director of Iranian Gas Engineering and Development Company (IGEDC).

Alireza Gharibi said construction of the pipe line, which will begin in 2013 and will take five years, will be undertaken by Iranian firms, the Mehr News Agency reported.

The Iranian gas will be fed into four Iraqi power plants, he noted.

Iran has the second largest proven gas reserves in the world after Russia. Iraq has said that it needs 10 to 15 million cubic meters of Iranian gas each day.

Iran’s natural gas production capacity stands at around 554 million cubic meters per day, the National Iranian Gas Company’s spokesman said on February 5.

 

 

UK ordered to pay $650 mn to Iran

Apr 25, 2010

An arbitration court in The Hague has ordered the British government to refund $650 million to Iran over an outstanding 1970s arms deal.

The British government has confirmed the court’s ruling and that the compensation money for Iran is now sitting in bank accounts waiting to be withdrawn, ABC reported on Sunday.

Between 1971 and 1976, the Shah of Iran had ordered 1,500 state-of-the-art Chieftain battle tanks and 250 military vehicles costing $650 million, The Independent reported.

The deal was canceled after the Islamic Revolution in 1979 and Iran took Britain to court to reclaim the down payment.

The Independent has revealed that Britain is to pay back nearly 400 million pounds to Iran’s Defense Ministry after finally admitting defeat in the dispute.

According to The Independent report, the settlement between International Military Services (IMS) Ltd, the company used by the British Ministry of Defense to strike the tank deal with the Shah in the 1970s, and Iran’s Defense Ministry will be finalized in the coming weeks.

Iran’s currency to shed three zeros

 

The Iranian finance minister has announced a plan to remove three zeros from the national currency, Rial, in a move to optimize financial performance.

Iran “will remove three zeros from the national currency this year on the condition that the prerequisites are achieved,” Minister of Economic Affairs and Finance Shamseddin Hosseini told IRNA on Saturday.

Hosseini made a reference to Iran’s financial regulatory policies and oversight of its Central Bank, which were approved earlier within a package and noted, “There are initiatives in the package that project lower expenses, stability and performance improvement in the country’s banking and monetary sectors.”

He added that based on such policies, the country could focus on removing the extra zeros.

The Iranian minister noted that establishing stability in the prices would serve as the first step to achieve the objective.

The decline in the value of Iran’s national currency in recent decades has triggered a number of objective and subjective dilemmas, analysts say.