Published: September 19 2000 15:02GMT | Last Updated: September 19 2000 15:03GMT Iran's location naturally means that Tehran figures prominently in any discussion of current or future energy exports from the Caspian, but Iran's own potential as a Caspian producer is only just beginning to be assessed. The Iranians announced in August that an estimated 3bn bbl of recoverable reserves lie in their Caspian sector. While this figure is useful (equivalent to around half of the UK's proven North Sea reserves), that amount is only marginal by comparison with the country's 90bn bbl of proven reserves in and around the Gulf. Moreover, as the government has emphasised, Iran lacks indigenous resources to develop more accessible hydrocarbon reserves in the Gulf, much less its Caspian prospects. The deputy head of the National Iranian Oil Company, Mehdi Mir-Moezzi, has declared that "preliminary seismic studies show that we have 10bn bbl of in-place crude in our 20% of the Caspian Sea, of which 2.5-3bn bbl are recoverable." Royal Dutch/Shell and the UK's Lasmo carried out these preliminary studies during the last two years under an agreement which grants the companies exclusive rights to four development blocks should oil be discovered. So far, however, the preliminary results remain based on seismic studies, not drilling. Mir-Moezzi confused the Caspian question with his reference to Iran's 20% share of the sea's resources. Iran, at present, does not control anything like this volume of the Caspian, although it insists that any partition of Caspian sub-sea oil and gas resources should guarantee Tehran one-fifth of the sub-sea area. The old Iranian-Soviet frontier, drawn as a straight line between the border posts on the eastern and western sides of the sea, left some 12% of Caspian waters on the southern, Iranian, side of this de facto maritime boundary. However, were Tehran to agree to base future boundary agreements with its new neighbours Azerbaijan and Turkmenistan on widely accepted principles of a median line division, then Iran might be expected to secure around 16% of the Caspian's waters or (if the waters themselves were to remain international) of the Caspian's sub-sea resources. East European Energy Report understands that Shell and Lasmo have confined their surveys to essentially uncontested waters. The Caspian volumes discovered also lag behind the country's recent gas finds. The new Homa discovery, announced in August, is officially said to contain about 6.7trillion ft3 (around 1980bn m3) of natural gas and 82m bbl of liquid gas, with recoverable reserves put at 133.1bn m3 and 58m bbl respectively. In effect, recoverable reserves amount to the equivalent of around 900m bbl of crude - and Homa is only one of several gas finds announced in recent months. On 28 August, Iran announced it had discovered 5.34bn bbl of crude and 28.7 trillion ft3 (820bn m3) of gas over the last three years. It was not immediately clear whether this included the Caspian oil reserves (which would not normally be reported as discoveries until confirmed by drilling) or the Homa gasfield. On 27 August, Oil Minister Bijan Zanganeh listed proven reserves as totalling 96bn bbl of crude and 26 trillion ft3 of gas (including 12 trillion ft3 in the giant South Pars offshore field), against previous government estimates of 92 bbl and 22 trillion ft3. Zanganeh used the upgraded reserve estimates to underline Iran's attractiveness to foreign investors. The minister said Iran needed to draw in foreign investment to develop oil and gas fields - and made it clear that Iran lacks the cash necessary even to maintain output at current levels, let alone to increase output significantly. "Our private sector does not have the big money needed to invest in upstream energy projects," Zanganeh said. "If we lose our share in OPEC, we will suffer great economic losses. We have to raise our capacity to 5m b/d as soon as possible. This requires big investment." East European Energy Report _______________________________________________ Crashlist resources: http://website.lineone.net/~resource_base To change your options or unsubscribe go to: http://lists.wwpublish.com/mailman/listinfo/crashlist
