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Oil and gas: Iran

Hydrocarbon Engineering,


Overview

  • Iran ranks as the world’s fourth and second largest reserve holder of oil and natural gas respectively.
  • Iran also ranks among the world’s top 10 oil producers and top 5 natural gas producers.
  • The country produced 3.2 million bpd of petroleum and other liquids in 2013 and more than 5.6 trillion ft3 of dry natural gas in 2012.
  • The Strait of Hormuz is an important route for oil exports from Iran and other Persian Gulf countries.
  • An estimated 17 million bpd of crude oil and oil products flowed through the Strait in 2013.
  • Approximately 3.9 trillion ft3 of LNG was transported via the Strait of Hormuz in 2013, almost all of which was from Qatar, accounting for approximately one third of global LNG trade.
  • Iran’s oil production has declined substantially over the past few years, and natural gas production growth has slowed, despite the country’s abundant reserves.
  • International sanctions have stymied progress across Iran’s energy sector, especially affecting upstream investment in both oil and natural gas projects.
  • The US and EU enacted measures at the end of 2011 and during the summer of 2012 that have affected the Iranian energy sector more profoundly than any previously enacted sanctions.
  • In the 2012/2013 fiscal year, oil and natural gas export revenue dropped by 47% to US$ 63 billion.
  • Iran’s oil and natural gas export revenue fell again in the 2013/2014 fiscal year by 11% to US$ 56 billion.
  • Iran exports a small volume of natural gas, as most of its production is domestically consumed.
  • Iran’s natural gas sector has been expanding, but production growth has been lower than expected as a result of the lack of foreign investment and technology.
  • Iran’s crude oil and condensate exports increased in late 2013 and have maintained a level above the 2013 average.
  • From January to May 2014, Iran’s crude oil and condensate exports averaged 1.4 million bpd.
  • In 2012, Iran consumed 9.6 quadrillion Btu of energy.
  • Natural gas and oil accounted for 98% of Iran’s total primary energy consumption in 2012.
  • Iran’s primary energy consumption has grown by more than 50% over the past 10 years.
  • The energy sector is overseen by the Supreme Energy Council, which was established in July 2001 and is chaired by the president of Iran.
  • The three key state owned enterprises are the National Iranian Oil Company (NIOC), the National Iranian Gas Company (NIGC), and the National Petrochemical Company (NPC).
  • The Iranian constitution prohibits foreign or private ownership of natural resources, and all production sharing agreements (PSAs) are prohibited under Iranian law.
  • Iran recently announced a new oil contract model called the Iranian (or Integrated) Petroleum Contract (IPC), although it is not yet finalised and is subject to change.
  • Chinese and Russian companies are the only IOCs currently directly or indirectly involved with developing oilfields.
  • As a result of the poor investment climate and international political pressure, some IOCs, including Repsol, Shell, and Total, divested from Iran’s natural gas sector.

Oil and oil products

  • As of January 2014, Iran has an estimated 157 billion bbls of proved crude oil reserves, representing nearly 10% of the world’s crude oil reserves.
  • Roughly 80% of Iran’s reserves were discovered before 1965.
  • Approximately 70% of Iran’s crude oil reserves are located onshore and the remainder offshore, mostly in the Persian Gulf.
  • Iran is one of the founding members of OPEC, which was established in 1960.
  • In 2013, Iran produced approximately 3.2 million bpd of petroleum and other liquids, of which roughly 2.7 million bpd was crude oil, 0.4 million bpd was condensate, and 0.1 million bpd was natural gas plant liquids.
  • Iran faces continued depletion of its production capacity, as its fields have relatively high natural decline rates of 8 – 11%, coupled with an already low recovery rate of 20 – 25%.
  • Sanctions and unfavourable contractual terms have impeded the necessary investment to halt this decline.
  • For the first half of this year, the US EIA estimates that Iran’s total oil production increased by an average of 200 000 bpd, compared with the annual average last year.
  • Iran’s crude oil is generally medium in sulfur content.
  • For the first half of 2014, Iran produced approximately 600 000 bpd of non-crude liquids.
  • Iran has not had a new oilfield enter into production since 2007.
  • Virtually all western companies have halted their activities in Iran, although these are some Chinese and Russian companies that are still participating.
  • Iran’s crude oil and condensate exports averaged 1.1 million bpd in 2013.
  • Iran’s exports increased in the beginning of 2014.
  • From January – May of this year, Iran’s exports averaged 1.4 million bpd, 300 000 bpd higher than the 2013 annual average.
  • In addition to crude oil and condensate, Iran also exports petroleum products.
  • Iran exported approximately 240 000 bpd of petroleum products in 2013, most of which was fuel oil and LPG sent to Asian markets.
  • US and EU sanctions affected Iran’s ability to sell petroleum products.
  • The Kharg, Lavan, and Sirri Islands terminals, located in the Persian Gulf, handle almost all of Iran’s crude oil exports.
  • Iran is the second largest oil consuming country in the Middle East.
  • Iranian domestic oil consumption is mainly diesel, gasoline and fuel oil.
  • Total oil consumption averaged 1.75 million bpd in last year, 3% higher than in 2012.
  • As of September 2013, Iran’s total crude oil distillation capacity was nearly 2 million bpd.
  • In 2013, Iran imported almost 17 000 bpd of petroleum products, of which roughly 85% was gasoline.
  • Over the past several years, Iran’s gasoline import dependence has decreased significantly as a result of increased domestic refining capacity and subsidy cuts.

Natural gas

  • As of January this year, Iran’s estimated proved natural gas reserves were 1.193 trillion ft3.
  • Iran holds 17% of the world’s proved natural gas reserves and more than one third of OPEC’s.
  • Iran’s natural gas resources are abundant, and although exportation for new resources is not a priority for the Iranian government, a number of new finds have been announced recently.
  • Gross natural gas production totalled approximately 8.2 trillion ft3 in 2012, increasing 3% from 2011.
  • Iran flared the second largest amount of natural gas in the world in 2012.
  • Iran’s dry natural gas production has rapidly increased to more than 5.6 trillion ft3 in 2012.
  • Iran is the world’s third largest dry natural gas producer and accounted for nearly 5% of the world’s dry natural gas production in 2012.
  • Domestic consumption has increased alongside production and totalled 5.5 trillion ft3 in 2012.
  • The natural gas sector has been hampered by international sanctions.
  • In 2012, Iran consumed an estimated 5.5 trillion ft3 of dry natural gas.
  • Iran has experienced seasonal natural gas supply shortages in the winter months mostly because of the delay of the South Pars project.
  • Iran’s natural gas imports declined by roughly 50% in 2012 over the previous year.
  • Iran is planning to expand its underground natural gas storage capacity to ensure that enough natural gas is available during peak demand periods.
  • Iran accounted for less than 1% of global natural gas trade in 2012.
  • Iran does not have the infrastructure in place to export or import LNG.
  • Iran’s natural gas imports declined by roughly 50% in 2012 compared with 2011.
  • In 2011, Iran received almost 30% of Turkmenistan’s gas exports.
  • Iran exports natural gas to Turkey, Armenia and Azerbaijan.

Adapted by Claira Lloyd

Read the article online at: https://www.hydrocarbonengineering.com/gas-processing/30072014/iranian-oil-gas-sector-eia/


 

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