|
Iran: Pioneer source of oil in the Middle East
Archeological research studies conducted in Sush (Susa) indicate that tar had
been used in shipbuilding, construction and ornamental works at the time of the
Sumerians (about 3500 years B.C.) and objects dating back to that time further
prove that Sumerians had access to natural gas.
In the years 1872 and 1889 "Reuter" gained two concessions for oil
exploration in Iran but, however, the concessions were nullified due to domestic
protests as well as the reaction of the Russian government. In 1890, a French
geologist found out in the course of his research works that there are large oil
reserves in Iran. The story reached William Knox d'Arcy through Antoin Ketabchi.
Finally, in the year 1280 (1901) d'Arcy managed to obtain the concession for oil
exploration activities throughout Iran except for five northern provinces. In
the early hours of May 26, 1908 oil erupted from a drilling platform at Naftoon
region in Masjed Soleyman with a terrifying noise and 30 meters above the
drilling rig.
Following the drilling of other wells in the same region and building of
Masjed Soleyman-Abadan pipeline, the Abadan Refinery came on stream with a
capacity of 2400 barrels per day in 1292 (1912-1913) as the first oil refinery
in the Middle East.
In 1914 and prior to the outbreak of the World War I, the British navy took
possession of 51 percent of the shares in Iran-Britain Oil Company in practice.
The d'Arcy concession and the process for Britain's partnership were so cruel
that it entailed strong religious, political and popular opposition. The period
marked one of the sensitive and highly turbulent eras in the history of Iran.
People sought nationalization of oil industry and their aspiration was realized
on March 20, 1951 the date on which the first oil concession in the Middle East
was nullified and Iran's oil industry was nationalized.
Crude oil production
|
Iran's proven crude
oil reserves which were registered at 92.6 billion barrels by last year,
increased to at least 100 billion barrels with the discovery of Azadegan oil
field, putting Iran in the second place in terms of production and export of
crude oil within the Organization of Petroleum Exporting Countries (OPEC).
Production of crude
oil started in Iran in 1291 (1911-1912) with a capacity of 860 barrels per day
and in 1329 (1950-1951), following nationalization of oil industry, it jumped to
about 635,000 barrels per day. However, in the aftermath of the nationalization
of oil and due to international embargos, the oil
|
 |
industry and
especially oil exports suffered stagnation and were thoroughly closed down to
the extent that in the years 1330-1333 (1951-1954) oil production dropped to as
low as 40-50 thousand barrels per day. With the signing of the contract for the
formation of a consortium in 1333 (1954) the oil industry resumed its overall
activities and subsequently in the year 1342 (1962-1963) oil production exceeded
the margin of 2 million barrels per day. Production of crude oil reached its
peak in 1355 (1975-1976) with a daily output of 6 million barrels.
Oil production once again reduced with the victory of the 1979 Islamic
Revolution and in 1359 (1979-80) it dropped to as low as 1.4 million barrels per
day. Closure of Iran's oil industry and halt in oil exports was the prime
objective of the enemy in the course of the eight-year imposed war. But, in the
light of the efforts of the staff of the industry, production and export of oil
did not cease even for one single day. In the aftermath of the war oil
production increased and in 1374 (1994-1995) amounted to 3.9 million barrels per
day. Currently, Iran produces 3.727 barrels of oil per day on the basis of an
agreement reached among OPEC members in March 1999.
Crude oil refining capacity
Iran is currently equipped with 9 refineries with an approximate capacity of
1.5 million barrels per day. The Abadan Refinery with a nominal capacity of
420,000 barrels per day is the oldest and largest refinery in the country while
Lavan with a capacity of 20,000 barrels per day is the smallest.
Natural gas reserves
Iran's proven gas reserves are estimated at 29.2 trillion cubic meters with a
production capacity of about 23 trillion cubic meters. The reserves are stored
in 117 oil and gas fields either as independent fields or as gas layers in oil
wells. The remaining gas reserves in the country was estimated at 19.24 trillion
cubic meters in early 1377 (1998), about 60 percent of which are stored in
independent fields. However, about 50 percent of the natural gas fields have not
been developed yet which points out the fact that Iran has the potential to
produce even more natural gas. The South Pars gas field is the world largest and
is jointly shared with Qatar. For each one million cubic metes of natural gas
there is over 250 cubic meters of gaseous liquids that provides a satisfactory
support for meeting financial demands for the development of the field.
In
1376 (1996-97), the French company Total together with Gazprom of Russia
and Petronas of Malaysia signed a contract worth 4.1 billion dollars for the
development of phases 2 and 3 in South Pars field. The contract for the
development of phases 4 and 5, worth 3.8 billion dollars, was signed with the
Italian company Agip and Petropars of Ian on July 27, 2000.
Natural gas production amounted to over 90 billion cubic meters in 1378
(1998-1999) of which about 50 billion cubic meters was consumed for household
purposes as well as by power plants and in industries. Meanwhile, some 10
billion cubic meters were burnt and over 25 billion cubic meters were injected
into oil wells. The National Iranian Gas Company is equipped with five
refineries with a daily capacity of 208 million cubic meters. The largest is
Vali-e Asr Refinery with a capacity of 89 million cubic meters per day.
Petrochemical industry
|
Ten petrochemical complexes with an approximate capacity of 13 million tons
annually are operating in the Islamic Republic of Iran and are currently
producing various types of tire, rubber, detergent, acid, fertilizer, glue,
synthetic fiber, pesticide and paint. The Bandar Imam Petrochemical Complex with
a capacity of 4.3 million tons per year is the largest.
Petrochemical industry launched its activities in Iran in 1342 (1962-1963)
with the setting up of a plant on Marv-Dasht for the production of chemical
fertilizer. No serious attention was paid to the petrochemical industry prior to
the victory of the Islamic Revolution. However, in the aftermath of the 1980-88
imposed
|
 |
war, greater
attention was paid to the rehabilitation and development of the petrochemical
industry. With the building of nine more complexes in the following years, the
industry was highly boosted. In 1376 (1996-1997), export of petrochemical
products showed an increase of 10 percent over the preceding year and amounted
to 560 million dollars. But, the following year exports dropped by 19 percent
due to the fall in prices at world market. The total of 6.7 million tons of
petrochemical products were sold in the year 1378 (1998-1999) and petrochemical
exports amounted to about 580 million dollars in the same year. The National
Iranian Petrochemical Company (NIPC) plans to increase its annual
production capacity to 30 million tons by the year 2020 as part of the
stipulations of a long-term program. To this end, executive operations have been
launched in the special economic-petrochemical zone at Bandar Imam for a mega
project that will encompass seven new large petrochemical companies namely, Amir
Kabir, Bu Ali Cina, Khuzestan, Shahid Tondguyan, Fajr, Fanavaran and Mobin. The
Kharg Methanol project has come on stream at the Kharg Island with a capacity of
660,000 tons.
Foreign investment
In August 1996, the U.S. Congress approved Iran-Libya Sanction Act (ILSC)
that banned companies from investing over 20 million dollars in the Iranian oil
and gas sectors. Within such a framework, the Clinton administration compelled
Conoco to withdraw a contract it had already concluded with Iran for the
development of Sirri A and E fields. This made Iran to enter into negotiations
with non-American companies for the development of its oil and gas industries.
The contract for the development of South Pars gas field was the first major
agreement with non-American companies on which the U.S. failed to impose any
sanction. This encouraged smaller companies to enter into negotiations with Iran
and reach agreements with the country. In July 1998 and in the course of an
international conference in London, 45 buy-back contracts were offered at the
gathering that comprised 29 development and 16 exploration projects.
The contract for the development of South Pars gas field was the biggest in
this connection. Prior to South Pars, an agreement was reached with the French
Total and Petronas of Malaysia for the development of Sirri A and E fields which
was launched in September last year. In March 1998, the contract for the
development of Doroud oil field, worth 1 billion dollars, was concluded within
the framework of buy-back schemes with a consortium comprising Elf from France
and Agip from Italy. In April 1998 a 300-million-dollar agreement was reached
with Elf and Bow Valley of Canada for the development of Balal oil field.
On November 14, 1999 Iran signed a contract worth 1455 million dollars with
the Royal Dutch/Shell Company for the development of Nowrouz and Soroush fields.
Another contract was signed on July 28, 2000 with the Italian company Agip and
Petropars of Iran for the development of phases 4 and 5 of South Pars field. The
target of the 1896-million-dollar contract is the daily production of 50 million
cubic meters of natural gas, 80,000 barrels of gaseous liquids, 400 tons of
sulphur, 1.050 million tons of liquid gas and 1 million tons of ethanol.
|
