Oil, Gas
sectors flourishing under Iran’s current government
By Reza Abesh Ahmadlou
Staff writer
Iran’s oil and gas industry has witnessed an eye-catching productivity growth under the current administration as it has focused on beating off economic challenges since President Ebrahim Raisi took office in August 2021.
Signs of hope for finding a way out of the 2010s stagflation have now appeared thanks to the current administration’s efforts as the average economic growth in 2021 and 2022 rose to 4.2 percent, of which 75 percent owes to productivity growth. The oil and gas industry has played a greater role when compared to other sectors’ shares in achieving the economic growth.
According to the figures released by the Statistical Center of Iran (SCI), the oil industry registered 19.8 percent and 25.6 percent growth in spring and summer 2023 respectively – 22.7 percent on aggregate in the six months – having a 16 percent role in increasing Iran’s gross domestic product (GDP). The SCI data also showed that Iran’s economic growth in summer 2023 stood at 7.1 percent if the oil sector’s growth included and 4.2 percent if excluded.
Rise in production
The oil and gas industry’s productivity has soared to 12.6 percent from -3.7 percent as domestic economy’s productivity rate has reached 3.7 percent from 0.8 percent, showing the country’s productivity and economic growth owes to the oil industry more than other sectors.
The country’s oil production has jumped 60 percent since August 2021.
According to OPEC statistics, Iran’s crude production hit 3.154 million barrels per day (mbd) in December 2023, while the figure was at a record low of 1.93 mbd in July 2020.
Delivery of gas to industries
Since October 2021, 3,195 more industrial units have been supplied with gas, concluding the number of industrial consumers has soared to 32,518.
Sixteen power plants receiving gas have been added since October 2021, increasing the total number to 102.
Higher storage of gas
Gas stockpiled in Iranian storages broke the country’s 10-year record as three billion cubic meters of gas have been stored in Sarajeh and Shourijeh facilities.
The stored volume is for injection into the national grid during cold days of the winter.
Gas injection record, no supply problem
Record 851 million cubic meters (mcm) of gas were injected into the national network on January 27.
The country’s gas output has witnessed a 30 mcm/d increase when compared to the volume produced a year earlier, said the minister.
New discoveries
Three oil and one gas fields have been discovered since August 2021.
The discovery of four fields has soared the country’s recoverable liquid hydrocarbons by 2.6 billion barrels.
Hirkan oilfield in northern province of Golestan, Tengoo and Genaveh oilfields in southwestern province of Bushehr, and Cheshmeh Shour gas field in northeastern province of Khorasan Razavi are the four fields discovered in the past two years.
Given the latest discoveries, the reserve replacement ratio for liquid hydrocarbon is 87 percent, it means if 100 barrels of crude oil and gas condensates are produced in Iran and consumed inside the country or exported to other countries, 87 barrels of that output have been replaced by newly-discovered deposits.
3D seismic data acquisition operations have increased 300 percent under the current administration when compared with surveys carried out during the four years before.
Prioritizing joint fields
The daily extraction of crude oil from the joint oilfield of Azadegan, along the Iran-Iraq border, to 500,000 barrels per day, as the figure currently stands at 200,000 bpd.
Six contracts have been signed on the development of oil and gas fields.
Contracts with a total value of $14 billion will be inked by March 19 to develop eight other oil and gas fields.
Top in exploration
Iran stands top among regional countries, including Saudi Arabia, Iraq, Kuwait, the United Arab Emirates, and Qatar, in terms of exploration, as all wells drilled for exploration purposes have contained hydrocarbon, meaning the exploration success rate has stood at 100 percent.
Over the past two years, $20 billion have been invested to complete the unfinished projects with the aim of increasing production and added value.
Flare gas capture
The Oil Ministry has announced plan for gathering 2 billion cubic feet of flare gas which would be carried out under five long-term plans.
A total of $5 billion have been invested in this sector, as all flare gas gathering projects are operated by the private sector and all costs would be recouped by feedstock supply.
Long-term projects for flare gas capture include building LPG plants and flare gas capture stations which are expected to come on stream by March 2026.
Shot-term projects include flare gas gathering from facilities in the three provinces of Khuzestan, Bushehr Kohgiluyeh and Boyer Ahmad which are planned under a $1.1 billion contract with Persian Gulf Bidboland Gas Refining Company. That would help capture 593 mcf/d of gas, thereby supplying 1.5 tons of feedstock to refineries per annum.
Petchem production up
Iran’s annual petrochemical production capacity will surpass 95 million tons by the end of the current Iranian year (March 19, 2024) as the figure was around 2.5 million tons in 1979.
NPC has conducted a thorough study on the petrochemical industry’s value chain, launching 20 project packages for producing propylene, methanol, ethylene, aromatics, and butylene.
South Pars
completion
Iran, in August 2023, brought to operation the last development phase of the world’s largest gas field in the Persian Gulf which French oil and gas major Total quit twice under sanctions.
Inauguration of Phase 11 of South Pars, developed by Iranian experts, put an end to 20 years of waiting and saved the country $800 million in development costs.
Extraterritorial refinery project
The National Iranian Oil Refining and Distribution Company (NIORDC) was the first Iranian company to start extraterritorial refineries.
Venezuela was the first country, and El Palito was the pilot refinery for Iran’s extraterritorial project.
The El Palito refinery project in Venezuela has progressed by about 85 percent, as 85-90 percent of its equipment has been provided by Iranian companies.
Iran also has reached an agreement with South Africa to develop and equip five refineries in the African state.
The agreement was reached on the sidelines of the 15th BRICS Summit in Johannesburg, South Africa, under which the Iranian Oil Ministry will help to develop five refineries in South Africa by exporting technical and engineering services.
Greater refining output
Iran’s refining industry has refined 2.2 mb/d of crude oil and gas condensate, supplied 112 ml/d of diesel and 100 ml/d of gasoline. This achievement has been made owing to the implementation of strategic projects and switch from fuel-based approach to profit-based approach.
The country will reduce crude oil and natural gas sales by developing the value chain and bring its oil refining capacity to 3 mb/d.