Despite all the ups and downs caused by the imposed war and unilateral US sanctions, the Iranian oil industry has since maintained its growth. The giant South Pars gas field has been developed, and petrochemical production has grown 46-fold while gas production has seen 10-fold growth. Furthermore, Iran’s oil refining capacity has reached 3.6 mb/d while gas refining capacity has exceeded 1 bcm/d. In the meantime, oil production and exports have continued despite sanctions.
“Iran Petroleum” offers a review of the performance of the petroleum industry spanning 46 years following the victory of the Islamic Revolution.
Oil, Gas; Harbingers of Development
Over the years, the gas industry has been a key source of energy production and hard currency generation for the country, displaying a strong presence in global markets.
Iran’s unprocessed gas production has grown 10 times since 1979 while condensate production has experienced a 24-fold increase. Under the 14th administration, gas production has increased 30 mcm/d.
In addition to South Pars, the Naar and Kangan, Aghar and Dalan, Sarkoun and Gourzin, Gonbadli and Khangiran gas fields have been developed following the Islamic Revolution. South Pars is currently producing 715 mcm/d of gas from 27 phases that have been developed.
Joint Fields’ Output Hike
These figures are not limited to gas. Crude oil production capacity also experienced significant growth under the 14th administration. Crude oil production has grown 60,000 b/d after making up for shortfalls. The bulk of production comes from the Karoun, Rag Sefid, Haftkal, Nargesi, Dehlorna, South Azadegan, Darquain, Sepehr and Jofair, Cheshmeh Khosh, Dalpari and East Paydar, Yaran, Aban and West Paydar, and Sohrab fields. Development of the onshore section of some joint oil and gas fields like the Reshadat, Forouzan and Salman, Mubarak, Nosrat, and Naftshahr had started before the Islamic Revolution, but their offshore section was developed after the revolution.
The production capacity from joint oil fields has reached 490,000 b/d with shared gas fields having a production capacity of 720 mcm/d. West Karoun fields, South Pars, Azar, and Khanigran are active. There are 20 joint oil fields, which are either active or under development. Three joint gas fields are operational, three others are under development while another two are under study.
Recoverable Hydrocarbons
Iran has recorded valuable data on hydrocarbon discovery and recoverable reserves. For instance, recoverable liquid hydrocarbon reserves have jumped from 88 billion barrels in the early days of the Islamic Revolution to 156.5 billion barrels by March 2024. Such an increase comes against the backdrop of more than 46 years of extraction from these deposits. Recoverable natural gas reserves have also increased significantly over the years, coming from 8 tcm to 32.3 tcm over the same period. As exploration operations go ahead, these figures are expected to keep growing. Currently, exploration operations are underway in various parts of Iran, from the Persian Gulf to Abadan Plain, North Dezful, Kopet Dag, Lorestan, Moghan, Gorgan Plain, and the southern Caspian Sea.
Oil Refining at 2.386 mb/d
In the oil refining and petroleum products sector, the refining capacity has increased from 1.1 mb/d to 2.386 mb/d over the said period. The 14th administration accounts for over 90,000 b/d of this increase. Gasoline and gasoil have increased 9 and 5 times, respectively in production. Gasoline production has increased 6.7 ml/d while gasoil output has grown 7 ml/d.
Construction of the Imam Khomeini oil refinery, the Bandar Abbas oil refinery, and the Bandar Abbas gas condensate refinery, development of the Tehran, Isfahan, Lavan, Abadan, and Tabriz refineries have all contributed to enhanced refining capacity.
Some measures associated with the refining sector have gone beyond borders, including an overhaul of the 140,000-b/d El Palito refinery in Venezuela for €110 million and exporting technical and engineering services.
Gas Refining at 1bcm/d
The natural gas refining and dehydration capacity stood at 36 mcm/d during the early days of the Islamic Revolution, which has now reached 1.087 bcm/d. During the years following the Islamic Revolution, only 2,500 km of natural gas pipeline had been installed and is now at 40,200 km.
Thanks to extended natural gas pipelines, 1,259 cities, and 40,755 villages have been connected to the national gas grid. Before the revolution, only five cities and one village were connected to the gas network.
As far as natural gas export is concerned, gas exports to Turkey started in 2001, which crossed 10 bcm by 2007. Natural gas exports to Iraq became operational in 2017 under the Baghdad Agreement (Naftshahr) and in 2018 under the Basra Agreement (Shalamcheh). Iran exported 16.6 bcm of gas to Iraq last calendar year.
Petrochemical Output Up 46-Fold
The petrochemical industry is a main pillar of the petroleum industry in the production chain. It is also the driver of economic, political, and social development in the country. It plays a key role in GNP. Iran’s oil industry is seven decades old, but the bulk of its development has occurred in the wake of the Islamic Revolution. Iran’s petrochemical production capacity was 2.5 mt in 1979, which has now reached 96.3 mt. Iran produced 1.6 mt of petrochemicals in 1979, which hit 74.3 mt last calendar year. Since the 14th administration took office, 24.2 mt of petrochemicals have been produced with exports reaching 13.4 mt.
Petrochemical production reached 5.9 mt during the first three quarters of the current calendar year, up 3.5% year-on-year.
As far as the petrochemical sector is concerned, petrochemical sales and exports are defendable. Petrochemical exports hit 23.9 mt during the three quarters of the current calendar year, up 6.7% year-on-year. Petrochemical sales have grown 4.7% year-on-year to hit 33.2 mt during the first three quarters of the current calendar year.
Flare Gas Value
Iran’s post-revolutionary energy record also pertains to flare gas gathering. Since the 1979 Islamic Revolution, many projects have been completed and come online to generate value in addition to preventing environmental pollution. One case in point is the NGL 3200 associated gas capture project that recently came online. Its second phase as well as the NGL 3100 project is expected to become operational shortly.
Furthermore, 16 flare gas projects have been put out to tender, 6 of which have come online with a capacity of more than 140 mcf/d. Five more contracts are close to being signed. Under the 14th administration, some projects have been implemented for the purpose of cutting environmental pollution and preventing gas flaring.
The first-ever sanctions imposed on Iran’s oil industry were in 1979. The Iranian energy market has since not experienced a single day without challenge from Western governments. However, no restrictions and deprivation could keep this big industry from moving ahead. Despite all sanctions and unilateral decisions aimed at isolating Iran, the country has relied on its domestic capacity to upgrade the quality of life, win a toehold in global markets, and struggle for its standing.
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