Iran has the largest gas reserve in the world and ranks fourth in oil reserve holdings among all countries. The Islamic Republic accounts for 18 per cent and 9.4 per cent of the world's total proven gas and oil resources, respectively. Despite its advantageous position, Iran has been lagging behind other nations due to lack of efficient projects, high domestic consumption, insufficient financial support, lack of technology and the western sanctions imposed upon Iran to curb their nuclear programme.
Iran's oil output has declined drastically. Iran produced nearly 3.628 mbpd in 2011. However, in 2013 their oil output declined to 2.7 mbpd. Iran has closed some oil fields as a result of decreasing oil exports. Their domestic refining capacity has also declined. Iran's active oil fields are witnessing rapid decline in productivity- 8-13 per cent annually.
Iran's oil recovery rate stands at around 20-30 per cent. The recovey rates of crude oil, liquid hydrocarbons and gas are 25 per cent, 29 per cent and 70 per cent, respectively. Despite plans to increase oil recovery rate by 1 per cent during Fourth and Fifth Development Plans, the recovery rate remained unchanged during the Fourth Plan because of lack of sufficient investment. Iran needed nearly $79.04 billion to reach a 1 per cent increase in crude oil recovery rate. Iran also witnessed a decline in the amount of gas injected into oil fields to bolster production. Iran needed to inject 200 mcm of gas but only 70 mcm was in injected into fields due to shortage of gas. In the past two years, the country’s domestic gas consumption has increased; the production level has also increased but the gas volume injected into oil fields has not seen a significant rise.
Iran’s oil refining capacity declined to 1.61 mbpd in 2012 from 1.772 mbpd in 2011. In 2013, a number of new projects were set up at the Arak and Bandar Abbas refineries and several plants had to be shut down for months following damages, explosions etc. However, the country’s gasoline consumption increased by 7.5 per cent to 70 million litres per day in the Iranian solar year that lasted from March 20- November 20. During this period, oil-gas consumption rose by 8 per cent to 100-105 million litres per day, while kerosene consumption decreased by 12 per cent to 8 million litres per day. Domestic consumption of fuel oil remained the same at 51 million litres per day, compared to the same period last year.
In 2013, Iran exported 135,000 bpd of fuel oil, which signifies that fuel oil exports increased in the first half of the year but then started to decline as a result of increased use of liquid fuel in domestic power plants after September. The Islamic Republic has not raised exports of other refined fuels but imports nearly 7 million litres of gasoline per day. Thus, Iran’s oil refining capacity has increased a little compared to 2012, but lower than in 2011.
Iran’s gas production level in 2012 was 160.5 billion cubic meters and the consumption level was 156.11 bcm, which indicates a 5.4 per cent and 1.4 percent increase when compared to 2011. In the current Iranian calendar year, the total gas consumption is likely to increase to 160 bcm. The country’s total gas refining level including gas imports from Turkmenistan amounted to 500 mcmpd. It is expected that the consumption level will reach 700 mcmpd in the winter.
In 2013, Iran’s gas output witnessed an increase after September- daily gas production increased by 3.1 mcmpd and surpassed 301 million cubic meters. Iran also experienced a rise by 12 mcmpd in refined gas output in South Pars.
Iran exported 7.5 bcm of gas to Turkey and its imports of 4.5 bcm from Turkmenistan remained the same compared to the previous year. Iran’s petrochemical exports declined by 13.8 per cent to 9 million tons in the first 8 months of the current Iranian solar year.
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| Iran's oil and gas sector |
Iran's oil recovery rate stands at around 20-30 per cent. The recovey rates of crude oil, liquid hydrocarbons and gas are 25 per cent, 29 per cent and 70 per cent, respectively. Despite plans to increase oil recovery rate by 1 per cent during Fourth and Fifth Development Plans, the recovery rate remained unchanged during the Fourth Plan because of lack of sufficient investment. Iran needed nearly $79.04 billion to reach a 1 per cent increase in crude oil recovery rate. Iran also witnessed a decline in the amount of gas injected into oil fields to bolster production. Iran needed to inject 200 mcm of gas but only 70 mcm was in injected into fields due to shortage of gas. In the past two years, the country’s domestic gas consumption has increased; the production level has also increased but the gas volume injected into oil fields has not seen a significant rise.
Iran’s oil refining capacity declined to 1.61 mbpd in 2012 from 1.772 mbpd in 2011. In 2013, a number of new projects were set up at the Arak and Bandar Abbas refineries and several plants had to be shut down for months following damages, explosions etc. However, the country’s gasoline consumption increased by 7.5 per cent to 70 million litres per day in the Iranian solar year that lasted from March 20- November 20. During this period, oil-gas consumption rose by 8 per cent to 100-105 million litres per day, while kerosene consumption decreased by 12 per cent to 8 million litres per day. Domestic consumption of fuel oil remained the same at 51 million litres per day, compared to the same period last year.
In 2013, Iran exported 135,000 bpd of fuel oil, which signifies that fuel oil exports increased in the first half of the year but then started to decline as a result of increased use of liquid fuel in domestic power plants after September. The Islamic Republic has not raised exports of other refined fuels but imports nearly 7 million litres of gasoline per day. Thus, Iran’s oil refining capacity has increased a little compared to 2012, but lower than in 2011.
Iran’s gas production level in 2012 was 160.5 billion cubic meters and the consumption level was 156.11 bcm, which indicates a 5.4 per cent and 1.4 percent increase when compared to 2011. In the current Iranian calendar year, the total gas consumption is likely to increase to 160 bcm. The country’s total gas refining level including gas imports from Turkmenistan amounted to 500 mcmpd. It is expected that the consumption level will reach 700 mcmpd in the winter.
In 2013, Iran’s gas output witnessed an increase after September- daily gas production increased by 3.1 mcmpd and surpassed 301 million cubic meters. Iran also experienced a rise by 12 mcmpd in refined gas output in South Pars.
Iran exported 7.5 bcm of gas to Turkey and its imports of 4.5 bcm from Turkmenistan remained the same compared to the previous year. Iran’s petrochemical exports declined by 13.8 per cent to 9 million tons in the first 8 months of the current Iranian solar year.
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