OIL PRODUCTION CAPACITY IN THE GULF (III)

Islamic Republic of IRAN
 

© 1995 The Centre for Global Energy Studies and the author.
All rights reserved. No part of this publication may be reproduced or
transmitted in any form or by any means, including photocopying and
recording, without the written permission of the publishers.
Every effort has been made to verify the accuracy of the information
contained in this volume, but the publishers do not accept any responsibility
for any losses that may result from decisions based upon the statistics
presented.

FOREWORD
The main motivation behind the preparation of this series of reports is the general belief that the
Middle East will be called upon to provide growing supplies to meet world oil requirements in the
coming years. This is certainly the outcome of most examinations of the longer-term supplydemand
position. In these analyses, the presence of large oil reserves in the Middle East is taken to be
equivalent to high levels of production capacity. It is implicitly assumed that oil from the Middle
East will flow at progressively higher rates in the future, in line with growing global oil demand.
Research at CGES regarding oil production capacity in the Gulf is aimed at examining this
assumption. The studies are designed to provide a realistic evaluation of the region’s future
production capacity and associated investments over the coming years.
This report is the third on oil production capacity in the Gulf to be published by the Centre for
Global Energy Studies. The first two reports were on the United Arab Emirates and Saudi Arabia.
Iran is one of the major oil producing countries in the Middle East and one that is expected to make
a significant contribution to world oil production in the future. Oil production in Iran peaked
during 1974 at 6 MMBOPD and although a target of 7 MMBOPD was set in the late 1970s, this
was not achieved. It is thus extremely important to inquire if such a target is still tenable.
Since the late 1970s, the Iranian oil industry has become embroiled in major upheavals, including
the Islamic Revolution in 1979 and the Iran/Iraq war from 1980 to 1988. As a consequence of these
events, production of crude oil plummeted to less than 2 MMBOPD before beginning the road to
recovery. Following the cease-fire, Iran’s annual production increased progressively from about
2.2 MMBOPD to over 3.6 MMBOPD, posing the urgent question as to whether even higher rates
can be achieved in the next few years. There are considerable differences of opinion. For example
some analysts have suggested an impending decline, or even a collapse, of oil production in Iran.
A great deal of interest has been demonstrated by the international oil industry in exploration and
development activities in Iran. In the light of existing resources, the potential for upstream operations
in both oil and gas is unquestionably considerable. Under these circumstances it seems inevitable
that such operations will increase ultimately, irrespective of whether the operators are the major
international oil companies, the independents, or the national oil company in Iran or, a combination
of the three groups. At present, the construction contractors and service companies believe that
they have the first option to become more closely involved in future developments. The oil
companies, both big and small, are convinced that sooner or later, they will be invited back to
actually participate in oil industry operations in Iran because of their financial capabilities and
multifaceted expertise.
The ability of indigenous Iranian organisations to carry out such activities is sometimes questioned,
but the more important aspects have less to do with operational matters than with the flow of funds.
In an industry which is as capital intensive as the oil industry, the adequacy, or not, of national
finances is the key to future development decisions.
Answers to these and other questions concerning the Iranian oil industry are not easy or simple.
From the technical point of view point, Iran’s present production capability cannot be evaluated
simply from an analysis of the country’s reserves and its past production performance. It would be
even less accurate to forecast future output from aggregate data. As with the study on Saudi Arabia
and the UAE, the only analytical approach is to carry out an evaluation on a field-by-field basis, an
exercise which involves data, time, patience, perseverance and both analytical skills and judgement.
And there is always a risk that the exercise may not yield sufficiently concrete results, because of
gaps in the database. In the Middle East in general it is not always possible for the researcher to
access sufficiently reliable data or to pierce the curtain of information. Despite these difficulties
the CGES has undertaken this in-depth inquiry because it was felt that the results were worth the
risk and that the research would result in a valuable compilation of data on individual oil and
gasfields. This in itself would constitute a contribution to the industry’s literature.
Post-revolutionary Iran has experienced major changes in public policy; contracts with the foreign
oil companies were nullified and the current constitution of the Islamic Republic precludes the
granting of concessions or equity rights. Even so, the possibility of the future involvement of
foreign companies cannot be ruled out, although this would not be the outcome of any simple
single layered decision-making process. Domestic politics will play an important role based on the
different tendencies and factions within the Islamic Republic. Internationally the policy of dual
containment will impose further restraints on reaching agreements. Technical and financial
constraints are factors of paramount importance to be taken into consideration while sensibilities
and national pride cannot be ignored.
As with the other reports in the series, the present report consists of three parts. Part III refers
basically to the technical database compiled on each individual field, while Part II consists of
detailed discussions of a technical nature regarding the oil and gasfields. Parts II and III thus
constitute the backbone of the report, with an abundance of data and technical analyses. Part I
presents the main results of the CGES inquiry within the larger framework of national economic
developments and energy policies. It presents a coherent discussion of past and present production,
future output capacities, inherent industry capabilities, investment requirements and policy issues,
including those related to the future structure of operations.

CONTENTS

BOOK 1
FOREWORD .............................................................................................................................     1-3
EXECUTIVE SUMMARY .....................................................................................................        1-11

PART I : OVERALL RESULTS AND CONCLUSIONS
INTRODUCTION TO PART I ...............................................................................................      1-25
I-A : HISTORY AND ORGANISATION ..............................................................................      1-27
I-B : DATA COMPILATION, SOURCES OF INFORMATION
AND METHODOLOGY ........................................................................................                     1-29
I-C : RESERVES AND RESOURCES .................................................................................       1-33
I-D : PRODUCTION HISTORY............................................................................................        1-37
I-E : OIL AND GAS INDUSTRY’S PERFORMANCE AND PRESENT STATUS..........     1-39
I-F : THE OIL AND GAS INDUSTRY IN DEVELOPMENT PLANS..............................       1-42
I-G : A REVIEW OF ONSHORE PRODUCTION CAPACITY PLANS..........................      1-45
I-H : PRESENT AND PROSPECTIVE PRODUCTION CAPACITY ..............................      1-54
I-I : NATURAL GAS...............................................................................................................        1-62
I-J : OIL CONSUMPTION, REFINING CAPACITY AND DOMESTIC PRICES.........       1-71
I-K : INVESTMENT REQUIREMENTS .............................................................................         1-77
I-L : THE COST OF PRODUCTION ...................................................................................       1-80
I-M : ECONOMY AND FINANCE .......................................................................................       1-82
I-N : FOREIGN COMPANIES INVOLVEMENT IN IRAN’S OIL INDUSTRY .............        1-89
I-O : CONCLUDING REMARKS.........................................................................................         1-95

PART II : DETAILED RESULTS AND TECHNICAL DISCUSSIONS
INTRODUCTION TO PART II ...........................................................................................          1-101
II-A: DETAILED TABLES OF RESULTS.........................................................................           1-102
II-B: DETAILED TECHNICAL DISCUSSIONS OF THE INDIVIDUAL FIELDS

ONSHORE FIELDS ....................................................................................................                  1-108
AB-E TEYMUR (oilfield) .............................................................................................................. 1-108
AGHA JARI (oilfield) .....................................................................................................................1-109
AGHAR AND DALAN (gasfields) ...............................................................................................1-112
AHWAZ (oilfield) ........................................................................................................................... 1-113
BIBI HAKIMEH (oilfield) .............................................................................................................. 1-116
BINAK (oilfield) ............................................................................................................................. 1-117
CHASHMEH KHUSH (oilfield) .....................................................................................................1-118
CHILLINGAR (oilfield) ................................................................................................................. 1-119
DALAN (gasfield) ...........................................................................................................................1-120
DARKHOVAIN (oilfield) ............................................................................................................... 1-121
DEHLURAN (oilfield) .................................................................................................................... 1-122
GACHSARAN (oilfield) .................................................................................................................1-123
GARANGAN (oilfield) ...................................................................................................................1-125
GEVARZIN (gasfield) ....................................................................................................................1-126
GONBADLI (gasfield) ...................................................................................................................1-127
GULKHARI (oilfield) ..................................................................................................................... 1-128
HAFTKEL (oilfield) ....................................................................................................................... 1-129
KABIR KUH (gasfield?) .................................................................................................................1-130
KANGAN (gasfield)....................................................................................................................... 1-131
KARANJ (oilfield) ......................................................................................................................... 1-132
KARUN (oilfield) ............................................................................................................................1-134
KHANGIRAN (gasfield) ................................................................................................................1-135
KILUR KARIM (oilfield) ...............................................................................................................  1-136
KUH-E MAND (heavy oil- and gas?- field) ..............................................................................1-137
KUPAL (oilfield) ............................................................................................................................. 1-138
LAB-E SAFID (oilfield) ................................................................................................................. 1-139
LALI (oilfield) .................................................................................................................................  1-140
MALEH KUH (oilfield) ..................................................................................................................  1-141
MANSURI (oilfield) .......................................................................................................................  1-142
MARUN (oilfield) ...........................................................................................................................  1-143
MASJED-E SOLEYMAN (oilfield) ...............................................................................................1-145
NAFT-E SAFID (oilfield) ............................................................................................................... 1-146
NAFT SHAHR (oilfield) ................................................................................................................. 1-147
NAR (gasfield) ................................................................................................................................ 1-148
NARGESI (oilfield) ........................................................................................................................  1-149
PAR-E SIAH (oilfield) .................................................................................................................... 1-150
PARSI (oilfield) ............................................................................................................................... 1-151
PAZANAN (oil and gasfield) .......................................................................................................1-153
QALEH NAR ..................................................................................................................................   1-155
RAG-E SAFID.................................................................................................................................   1-156
RAMIN (oilfield) ............................................................................................................................  1-157
RAMSHIR (oilfield) ........................................................................................................................ 1-158
SALAKH (gasfield)......................................................................................................................... 1-159
SARAJEH (gasfield) ...................................................................................................................... 1-160
SARKAN (oilfield) ........................................................................................................................ . 1-161
SARKHUN (gasfield)...................................................................................................................... 1-162
SHADEGAN (oilfield) .................................................................................................................... 1-163
SULABEDAR (oilfield) .................................................................................................................. 1-164
ZILOI (oilfield) ............................................................................................................................. .. 1-165

OFFSHORE FIELDS ..................................................................................................                  1-166
ABUZAR (oilfield ........................................................................................................................... 1-166
BAHRGANSAR (oilfield) .............................................................................................................. 1-168
BALAL (oilfield) ............................................................................................................................  1-169
DORUD - including KHARG (oilfield)........................................................................................ 1-170
FORUZAN (oilfield) ....................................................................................................................... 1-172
G STRUCTURE (gasfield) ............................................................................................................. 1-173
HENDIJAN (oilfield) ...................................................................................................................... 1-174
HENGAM (gas condensate field) ...............................................................................................1-175
HORMOZ AREA (mostly gasfields) ..........................................................................................1-176
NORTH PARS (gasfield) ...............................................................................................................1-177
NOSRAT (oilfield) .......................................................................................................................... 1-179
NOWRUZ (oilfield) ........................................................................................................................ 1-180
RESALAT & RESHADAT (oilfields) ............................................................................................1-181
SALMAN (oilfield) ......................................................................................................................... 1-182
SIRRI FIELDS (oilfields) ............................................................................................................... 1-183
SORUSH (oilfield) .......................................................................................................................... 1-184
SOUTH PARS (gasfield) ................................................................................................................1-185
II-C: SOME COMMENTS ON KHARG ISLAND EXPORT TERMINAL ..................            1-188
II-D: GAS LIQUID PLANTS & REFINERIES ................................................................            1-190
II-E: DRILLING...................................................................................................................             1-194
II-F: EXPLORATION..........................................................................................................            1-202

BOOK 2
PART III : BASIC INFORMATION ON OIL AND GAS FIELDS
ONSHORE FIELDS..................................................................................................................       2-9
AB-E TEYMUR ................................................................................................................................ 2-11
AGHA JARI ...................................................................................................................................... 2-13
AGHAR ............................................................................................................................................. 2-17
AHWAZ ............................................................................................................................................ 2-19
ASSALUYEH.................................................................................................................................... 2-24
BIBI HAKIMEH ............................................................................................................................... 2-26
BINAK............................................................................................................................................... 2-29
BUSHGAN ....................................................................................................................................... 2-32
CHAHAR BISHEH .......................................................................................................................... 2-34
CHASHMEH KHUSH ......................................................................................................................2-35
CHILLINGAR ...................................................................................................................................2-38
DALAN ............................................................................................................................................. 2-41
DAL PARI .........................................................................................................................................2-43
DANAN .............................................................................................................................................2-44
DARKHOVAIN .................................................................................................................................2-46
DEHLURAN .....................................................................................................................................2-48
GACHSARAN...................................................................................................................................2-51
GARANGAN.....................................................................................................................................2-55
GEVARZIN .......................................................................................................................................2-58
GONBADLI ......................................................................................................................................2-60
GULKHARI ......................................................................................................................................2-61
HAFTKEL .........................................................................................................................................2-63
JUFEYR ............................................................................................................................................2-67
KABUD .............................................................................................................................................2-69
KANGAN .........................................................................................................................................2-71
KARANJ............................................................................................................................................2-73
KARUN .............................................................................................................................................2-77
KHANGIRAN ..................................................................................................................................2-79
KHARG .............................................................................................................................................2-80
KHEYRABAD ..................................................................................................................................2-81
KILUR KARIM .................................................................................................................................2-82
KUH-E KAKI ....................................................................................................................................2-84
KUH-E MAND..................................................................................................................................2-86
KUH-E RIG ......................................................................................................................................2-88
KUPAL ..............................................................................................................................................2-90
LAB-E SAFID ................................................................................................................................. 2-93
LAL.................................................................................................................................................... 2-94
MALEH KUH ...................................................................................................................................2-99
MANSURI ....................................................................................................................................... 2-101
MARUN...........................................................................................................................................  2-104
MASJED-E SOLEYMAN...............................................................................................................2-109
NAFT-E SAFID ...............................................................................................................................2-111
NAFT SHAHR ................................................................................................................................2-114
NAR ................................................................................................................................................. 2-115
NARGESI ........................................................................................................................................ 2-119
PALANGAN ....................................................................................................................................2-120
PAR-E SIAH ....................................................................................................................................2-122
PARSI............................................................................................................................................... 2-125
PAYDAR .......................................................................................................................................... 2-128
PAYDAR WEST ..............................................................................................................................2-130
PAZANAN....................................................................................................................................... 2-132
QALEH NAR .................................................................................................................................. 2-135
RAG-E SAFID................................................................................................................................. 2-137
RAMIN ............................................................................................................................................ 2-140
RAMSHIR ....................................................................................................................................... 2-143
SA-ADATABAD .............................................................................................................................2-146
SALAKH ......................................................................................................................................... 2-147
SARAJEH ........................................................................................................................................2-149
SARKAN ......................................................................................................................................... 2-150
SARKHUN ...................................................................................................................................... 2-152
SARVESTAN................................................................................................................................... 2-154
SHADEGAN ................................................................................................................................... 2-155
SHUR .............................................................................................................................................. 2-158
SHUROM ........................................................................................................................................ 2-159
SIAH MAKAN ................................................................................................................................ 2-161
SULABEDAR ................................................................................................................................. 2-162
SUSANGERD ................................................................................................................................. 2-165
VARAVI ........................................................................................................................................... 2-167
VEYZENHAR ................................................................................................................................. 2-168
ZILOI ..............................................................................................................................................   2-170
OFFSHORE FIELDS............................................................................................................         2-173
ABUZAR ......................................................................................................................................... 2-175
ALPHA ............................................................................................................................................ 2-179
BAHRGANSAR ..............................................................................................................................2-180
BALAL ............................................................................................................................................ 2-184
DORUD - (up to 1980) ................................................................................................................2-186
DORUD - including KHARG (oilfield)......................................................................................2-189
FORUZAN (oilfield) .....................................................................................................................2-192
G STRUCTURE (gasfield) ...........................................................................................................2-195
HENDIJAN (oilfield) .....................................................................................................................2-197
HENGAM (gas condensate field) .............................................................................................2-201
KHARG (up to 1980) ...................................................................................................................2-203
MOBARAK ..................................................................................................................................... 2-205
NORTH PARS (gasfield) .............................................................................................................2-208
NOSRAT (oilfield) .........................................................................................................................2-211
NOWRUZ (oilfield) .......................................................................................................................2-212
RESALAT ........................................................................................................................................ 2-215
RESHADAT (oilfields) ..................................................................................................................2-218
SALMAN (oilfield) ........................................................................................................................2-221
SIRRI FIELDS (oilfields) ..............................................................................................................2-225
SIRRI A ........................................................................................................................................... 2-226
SIRRI C ........................................................................................................................................... 2-228
SIRRI D ........................................................................................................................................... 2-230
SIRRI E ............................................................................................................................................ 2-232
SORUSH (oilfield) .........................................................................................................................2-234
SOUTH PARS (gasfield) ..............................................................................................................2-236

APPENDICES
APPENDIX 1 - The Iranian Calendar ...................................................................................         2-241
APPENDIX 2 - Extracts From the First Development Plan (FDP) ...................................... 2-242
APPENDIX 3 - Extracts from the Parliamentary Bill for the Second Development Plan 2-246
APPENDIX 4 - Tables on Oil Reserves and Production ......................................................   2-265
APPENDIX 5 - Tables on Natural Gas .................................................................................        2-271
APPENDIX 6 - Tables on Expenditure and Production Cost ............................................... 2-283
APPENDIX 7 - Some Comments on the Reservoir Characteristics of Onshore Fields 2-289
APPENDIX 8 - Some Rock Units Forming the Main Reservoirs in Iran .............................2-290
APPENDIX 9 - Some Abbreviations ....................................................................................       2-291
APPENDIX 10 - Some Data on the Characteristics of Iran's Export Crude Streams.....2-292
APPENDIX 11 - Abbreviations Used for Field Names in Figures .........................................2-293