03 January 2005
Although Iran has been striving to become a major player in Caspian Sea oil business since 1991, the country has not yet begun production from the region.
The Caspian basin is important to world energy markets given its potential to become a major source of global oil and natural gas supplies in the next decade. The region is believed to hold the world's third largest oil and natural gas reserves after the Middle East and Russia. Preliminary survey conducted on eight major blocks of the southern Caspian has revealed an estimated proven oil reserves of almost 33 billion barrels, reported ISNA.
Caspian Sea littoral states include Azerbaijan, Kazakhstan, and Turkmenistan, Russia and Iran.
Iran insists that treaties on the status of the land-locked sea signed in 1921 and 1940 between Iran and the former Soviet Union, which call for equal sharing of the Caspian's resources between the two countries, remain valid. Iran has rejected as invalid all unilateral and bilateral agreements on the utilization of the sea's resources. The hydrocarbon-rich state believes that either the sea should be shared, or its floor and water basin be divided into equal (20 percent) shares.
In March 2002, Oil Minister Bijan Namdar-Zanganeh asserted that Iran would begin exploiting its fifth of the sea within a short time, and would not permit 'any other party to engage in oil exploration' in this area.
Oil development in the Iranian sector of the sea has been sluggish. Should Iran begin to exploit its 20 percent share; it can pump some 6.5-7 billion barrels of oil. If production costs is estimated at $10 per barrel, the country has to invest some $70 billion. Based on a price assumption of $30 per barrel, over $210 billion of revenues can be earned.
Southern Caspian's largest oil block, Alborz, jointly shared by Iran and Azerbaijan Republic, has proven reserves of 20 billion barrels.
Blocks 29 (Chalous) and six have the next largest amounts of oil. Current estimates show that these blocks contain three billion barrels each.
Oil Ministry's official statistics predict proven oil reserves of Noor and Rooyan blocks as 2.5 billion barrels, Ramsar block as 1.5 billion barrels, block of eight, which lies near Iranian shoreline, as 1.4 billion barrels, block of seven as 900 million barrels and block of 18 (Roudsar) as 500 million barrels.
In early 2004, a three-dimensional seismic survey of the southern Caspian was being conducted by five foreign giant oil companies including Royal Dutch/Shell.
National Iranian Oil Company (NIOC) has planned to begin exploration efforts in Alborz block late September 2004.
However, the drilling was put off until the summer as a result of a delay in implementing a semi-floating platform in Neka Port.
Since major oilfields in southern Iran are now half depleted, the country needs to maintain its 14.7 percent share in the Organization of Petroleum Exporting Countries and 5.6 percent share of global production. In addition to developing its active oilfields to extract 8.6 billion barrels per day in 2025, the resource-rich state should tap its oil and gas potentials in the Caspian Sea as soon as possible.
The question is whether Namdar-Zanganeh, in the final year of the Khatami administration's second and last term, would be able to materialize this goal.
Although Iran has been striving to become a major player in Caspian Sea oil business since 1991, the country has not yet begun production from the region.
The Caspian basin is important to world energy markets given its potential to become a major source of global oil and natural gas supplies in the next decade. The region is believed to hold the world's third largest oil and natural gas reserves after the Middle East and Russia. Preliminary survey conducted on eight major blocks of the southern Caspian has revealed an estimated proven oil reserves of almost 33 billion barrels, reported ISNA.
Caspian Sea littoral states include Azerbaijan, Kazakhstan, and Turkmenistan, Russia and Iran.
Iran insists that treaties on the status of the land-locked sea signed in 1921 and 1940 between Iran and the former Soviet Union, which call for equal sharing of the Caspian's resources between the two countries, remain valid. Iran has rejected as invalid all unilateral and bilateral agreements on the utilization of the sea's resources. The hydrocarbon-rich state believes that either the sea should be shared, or its floor and water basin be divided into equal (20 percent) shares.
In March 2002, Oil Minister Bijan Namdar-Zanganeh asserted that Iran would begin exploiting its fifth of the sea within a short time, and would not permit 'any other party to engage in oil exploration' in this area.
Oil development in the Iranian sector of the sea has been sluggish. Should Iran begin to exploit its 20 percent share; it can pump some 6.5-7 billion barrels of oil. If production costs is estimated at $10 per barrel, the country has to invest some $70 billion. Based on a price assumption of $30 per barrel, over $210 billion of revenues can be earned.
Southern Caspian's largest oil block, Alborz, jointly shared by Iran and Azerbaijan Republic, has proven reserves of 20 billion barrels.
Blocks 29 (Chalous) and six have the next largest amounts of oil. Current estimates show that these blocks contain three billion barrels each.
Oil Ministry's official statistics predict proven oil reserves of Noor and Rooyan blocks as 2.5 billion barrels, Ramsar block as 1.5 billion barrels, block of eight, which lies near Iranian shoreline, as 1.4 billion barrels, block of seven as 900 million barrels and block of 18 (Roudsar) as 500 million barrels.
In early 2004, a three-dimensional seismic survey of the southern Caspian was being conducted by five foreign giant oil companies including Royal Dutch/Shell.
National Iranian Oil Company (NIOC) has planned to begin exploration efforts in Alborz block late September 2004.
However, the drilling was put off until the summer as a result of a delay in implementing a semi-floating platform in Neka Port.
Since major oilfields in southern Iran are now half depleted, the country needs to maintain its 14.7 percent share in the Organization of Petroleum Exporting Countries and 5.6 percent share of global production. In addition to developing its active oilfields to extract 8.6 billion barrels per day in 2025, the resource-rich state should tap its oil and gas potentials in the Caspian Sea as soon as possible.
The question is whether Namdar-Zanganeh, in the final year of the Khatami administration's second and last term, would be able to materialize this goal.
© Iran Daily 2005
