Iran Finds Oil in Abadan for First Time

Date: 23 January 2019 - 21:39

News ID: ۶۲۴۲۷

TEHRAN (Dispatches) -- Iran has discovered oil in the southwestern Abadan region for the first time, Minister of Petroleum Bijan Zangeneh told reporters here on Wednesday.
The oil was found at a depth of 3,570 meters in an exploratory well on Minoo Island and is "very light and sweet”, he said. "This is the first time we’ve reached oil in the Abadan region.”
Zangeneh gave no estimate of how much oil the well might contain. He said drilling will continue to estimate the total volume of the reservoir and the possibility of production.
"We have a lot of hope to discover (more) oil in the Abadan area and this grade discovered at a depth of 3,770 meters has an API gravity of 40 which is very light and sweet,” he said.
Iran has also to determine whether it is an independent resource or an extension of an Iraqi oilfield currently producing on the other side of the border.
Iran's oil sector is facing U.S. sanctions imposed in November, including a pledge by President Donald Trump to bring the country's oil exports down to zero.
Trump has backtracked on that pledge, giving a 180-day waiver to eight customers of Iranian oil and is likely to extend it, according to analysts.
"As for the extension of the waiver for Iran's oil sales to some customers by the United States, we have to wait and see," Zangeneh said.
President Hassan Rouhani said on Wednesday Iran cannot be shut out of global energy markets because of its vast oil and gas reserves.
"With regard to oil issues, luckily we are pursuing various paths and roads for selling oil and we bypass American sanctions with pride,” Rouhani said.
Parliament Speaker Ali Larijani said the U.S. has failed to prevent Iran from exporting its oil.
"The U.S. sought to bring our oil exports to zero, but was unsuccessful,” he said. "At any rate, our oil is being sold, and we enjoy good economic relations with our neighbors.”
The sanctions, however, are believed to have led to a decline in Iran's oil sales, with Zangeneh refusing to say how many barrels are lost.
"I am not saying anything about the amount of Iranian oil production and exports, because talking about these issues will give America a signal for more sanctions," he said.
The United States withdrew from a nuclear deal with Iran last year and imposed sanctions to choke Iran’s oil and banking industries.
However, the dark clouds of sanctions have a silver lining for Iranian companies which normally have a slim chance of being involved in upstream projects because major investment schemes are mostly snapped up by international firms.
After the sanctions, the National Iranian Oil Company (NIOC) has wasted no time in putting its trust in their capabilities and not disappointing them.
On Tuesday, two NIOC subsidiaries and seven domestic companies signed $1 billion in contracts for enhanced recovery at nine aging oilfields of the country.
Zangeneh oversaw the signing to raise recovery at the fields by 90,000 barrels a day, media reports said Wednesday.
The fields – seven located in Khuzestan province and two in Bushehr and Fars provinces – are all onshore. They are among 33 oilfields selected for revival by Iranian companies at a total cost of $6 billion over three years after which they will add 300,000 barrels a day to Iran’s production capacity.
"We wanted to create projects only for Iranian contractors," Zangeneh said at the signing ceremony. "We wanted to raise hope among local companies as the U.S. wants to cause worry and upset Iranian people by the sanctions," he added.
NIOC Deputy Managing Director for development and engineering Reza Dehqan said the government will provide 80 percent of the funds and the contractors will share the remaining 20 percent.
After a year and half, the Iranian companies will have to use their income from operation of the fields to pay further costs of the projects, Zangeneh reportedly said.
Four of the 33 fields earmarked for development by Iranians are offshore, signaling probably the first ever inroads by domestic entities into a field which has traditionally been a monopoly of big foreign companies because of the complications involved.
Early this month, ISNA news agency said Iran was in talks with several domestic companies to extract more oil from South Pars after foreign companies abandoned the plan in the face of U.S. sanctions.
Officials have said the development of the layers is a complex process, where highly intricate horizontal drilling into different reservoirs is needed to link them up for cumulative production at an offshore wellhead.
U.S. re-enactment of sanctions has left Iran’s oil industry headed for choppy waters but officials say the measures will accelerate the growth of domestic capabilities.
"A few years ago, we were begging to foreign and even Chinese companies for the purchase of some drilling equipment, but we have now become self-sufficient for them,” head of exploration at NIOC Saleh Hendi said last month.
Iran, he said, was currently scouring 60 percent of its total area for new oil and gas reserves, including in places which were deemed until recently the least likely to have hydrocarbon-bearing formations.
"Our preliminary studies show that hydrocarbon resources are likely to be found in the Bostanabad and Miyaneh regions of East Azarbaijan Province,” he told reporters in Tehran.