Iran’s petroleum industry is over a century old, but its four-decade achievements have proven outstanding. Iran’s recoverable liquid hydrocarbon reserves amounted to 88 billion barrels before the 1979 Islamic Revolution, which has increased to 340 billion boe thanks to cutting-edge technology.
Iran has proven its achievements in the crude oil, gas, petrochemical, refining, and distribution sectors. Some breakthroughs include the operation of the massive South Pars gas field, the giant Yadavaran oil field, and the Bandar Abbas Gas Condensate Refinery.
Furthermore, 65 oil and gas fields have been discovered, bringing recoverable oil and condensate reserves to 160 billion barrels and recoverable natural gas reserves to 33 tcm. Eight-fold gas production is also an achievement in the E&P sector in the aftermath of the Islamic Revolution.
65 Fields Discovered
Since the 1979 revolution, 65 oil and gas fields have been discovered. South Pars is one of the largest gas reserves in the world. The massive Azadegan and Yadavaran oil fields are among the key exploration achievements following the Islamic Revolution. The rate of success in exploration in Iran has reached 100%.
It has also to be noted that Iran’s petroleum industry was in the hands of foreign countries and companies. Iran was dependent on other countries not only for technology but also for specialists and manpower. In the aftermath of the revolution, foreign manpower gradually left Iran to give way to local specialized labor.
On the other hand, due to restrictions caused by unilateral US sanctions, Iranian companies and contractors found a good chance to go ahead with the domestic manufacturing of equipment. Now local manufacturers and contractors can easily handle megaprojects in collaboration with domestic banks. That is before the Islamic Revolution, foreign companies used to import all equipment either from their respective country or a third country.
Joint Fields Development
Until 1979, Iran’s operation in joint oil fields was limited to the Forouzan oil field which Iran shares with Saudi Arabia, offshore fields jointly owned by the United Arab Emirates (UAE), and the Naftshahr field which Iran shares with Iraq. But today Iran has been developing the West Karoun cluster of fields, South Pars, Balal, and Azar among others.
Iran owns at least 28 joint fields, including 18 oil fields, 4 gas fields, and 6 oil/gas fields. Iran is among a few nations in the world with such a number of joint fields. Of the 28 fields, Iran shares 12 with Iraq, 7 with the UAE, 2 with Qatar, 2 with Oman, 1 with Kuwait, and 1 with Turkmenistan.
These fields range from small ones to massive ones like the South Pars and West Karoun fields. Iran has tried its best to avoid any halt in the development of these fields despite financial shortages and lack of access to foreign investment due to sanctions.
Iran is estimated to hold 67 billion barrels of oil in place in West Karoun. Iran was recovering nearly 50,000 b/d of oil from these fields, shared with Iraq, until 2013. But it has now reached 480,000 b/d. Furthermore, Nasrollah Zarei, CEO of Petroleum Engineering and Development Company (PEDEC), said recently that the operation of South Azadegan’s central treatment and export plant (CTEP), West Karoun’s output would reach 820,000 b/d.
South Pars, a Megaproject
The development of the South Pars gas field remains the most important project in the history of the Iranian petroleum industry. It is estimated to hold 39 tcm of gas and 56 billion barrels of condensate. Iran’s share amounts to 14 tcm of gas and 18 billion barrels of condensate, making up 8% of the world’s total.
Iran has invested $150 billion in South Pars to recover 2,300 bcm of gas from the giant field, taking in $414 billion in revenue.
Iran is recovering more than 700 mcm/d of rich gas from South Pars, whose thermal value is more than 4 mb/d of oil. In the meantime, the recovery of 650,000-700,000 b/d of gas condensate would highlight the vital status of this massive field in Iran’s energy basket.
Production at South Pars is not limited to gas supply. Part of South Pars products is used to feed petrochemical plants. With this feedstock supply capacity, 21 petrochemical plants operate at South Pars with an output of 39 million tonnes (mt).
Assaluyeh supplies 20.6 mt/y of products at its 13 upstream units, 7.6 mt/y from its 14 midstream units, and 4 mt from its downstream units. It is recognized as Iran’s most powerful petrochemical zone.
Pars Special Economic Energy Zone (PSEEZ) accounts for 90 mt of petrochemicals, of which 45 mt is destined for export. Of 24 petrochemical plants in Assaluyeh, 6 are fed on natural gas. Condensate production, depending on daily gas output, varies between 650,000 and 700,000 b/d. It is mainly fed into the Bandar Abbas Gas Condensate Refinery, which supplies 40% of the national gasoline output. Therefore, it could be argued that 40% of Iran’s gasoline production comes from the Persian Gulf Star Refinery.
The development of the South Pars Oil Layer (SPOL) is another achievement of Iran’s petroleum industry. Its first phase development would build capacity for 35,000 b/d of crude oil, not to mention the annual $510 million revenue.
2.4mb/d Refining Capacity
The refining capacity of Iranian refiners stood at 1.2 mb/d during the early days following the Islamic Revolution. Four decades on, 9 refineries are operating at 2.4 mb/d.
The Abadan oil refinery was recommissioned with a 130,000 b/d capacity in 1989 following the end of the imposed war. It produces LPG, gasoline, kerosene, gasoil, jet fuel, fuel oil, base motor oil, bitumen, oil solvents, sulfur, naphtha and associated gas.
Following the construction of the Abadan oil refinery i.e. the first in Iran, more refineries were planned and built. The Kermanshah, Lavan, Tehran, Isfahan, Tabriz, Shiraz, Arak, and Bandar Abbas (one oil and one condensate) refineries are among them. They have their development plans to enhance capacity and quality.
Star Refinery
Construction of the Persian Gulf Star Refinery is a big achievement in the post-revolutionary era. This facility was built to make Iran self-sufficient in Euro-5 gasoline production.
It is the most sophisticated treatment facility in the Middle East. It was designed to help perpetuate gas recovery from South Pars, reduce environmental pollution, and guarantee national self-sufficiency in supplying strategic energy commodities like gasoline and gasoil. The facility also supplies LPG, hydrogen, sulfur, jet fuel, and a variety of solvents.
14th Administration
Five months into office, the 14th administration has fared well in terms of oil production and export as well as gasoline and gasoil production among other products.
During this short period, the Ministry of Petroleum has added 60,000 b/d to national crude oil production capacity and 30 mcm/d to natural gas production capacity. On four occasions, the gas production record has been smashed with an output of 1.104 bcm/d.
In its latest report, the Central Bank of Iran (CBI) has introduced a new edition of economic indicators. It has updated some economic data. It shows that Iran’s oil exports increased during the first quarter of the current calendar year compared with the year before. The report put Iran’s oil exports at $17.634 billion during the first quarter. It included crude oil, petroleum products, natural gas, gas liquids, and gas condensate, exported by the National Iranian Oil Company (NIOC), National Iranian Gas Company (NIGC), National Iranian Oil Refining and Distribution Company (NIORDC), and National Petrochemical Company (NPC) among others. That covers customs and non-customs exports.
Gasoline Output Up
With increased feedstock supply to crude oil refineries, gasoline production has grown 10 ml/d, and gasoline output has risen 11 ml/d. When the petroleum products supply increases, foreign currency is saved rather than being spent on imports.
Motor gasoline production averaged 97.5 ml/d during the first five months of the current calendar year. The figure reached 107 ml/d by the end of the third quarter. The CEO of NIORDC has said that gasoline production will likely reach 130 ml/d by the end of the 14th administration’s term in office.
According to the latest data from the Ministry of Petroleum, gasoil production averaged 117 ml/d under the 14th administration, up 6 ml/d year-on-year.
The 5% increase in gasoil production under the 14th administration comes while this liquid fuel has been supplied 11% above planned.
Official data also show that gasoil supply to power plants under the 14th administration reached 4 billion liters, up 45% year-on-year.
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