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Urgent News:
Methanol and Electricity Generation System Using Flare’s Surplus Gases
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Belal oilfield future of Iran's oil reserves |
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Author : Iran Export and Import, Monthly Magazine
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The world is now challenging political and economic tensions that have emerged as a result of the daily increase in oil output, the subsequent increase in oil derivatives such as gasoline and other substances that are vitally important in running the wheels of global economy. In addition to industrialists and producers who have experienced impacts of oil price hikes on the value added of their products, many capitalists have now placed their hope in the words of oil rich countries in the Persian Gulf region.
Both Saudi Arabia, that has agreed to meet parts of the market requirements, and Iran which has neither announced any agreement nor made any denial, have implicitly left all the burdens of the decision-making on the Beirut conference in June 2004.
Under such circumstances OPEC members and other non-OPEC oil producers which supply oil to the international market while meeting demands of their domestic markets are awaiting the outcome of the conference.
Iran, a country which is cooperating with major oil companies of the world such as Total of France for the development of its new oil fields, is now after meeting its foreign exchange demands that are needed to address both the visible and invisible costs of its growing economy in the early 21st century.
Perhaps the following points have been taken into consideration while making plans for the future. However, these are the realities that should be carefully attended in the course of implementation of different economic and social development plans:
1-Oil revenues are not unlimited;
2-0il revenues are not fixed and are sometimes very difficult to forecast;
3-Economic fluctuations in an economy which is dependent on oil would highly affect longterm investment plans of the private sector;
4- The most important of all is that oil reserves are not renewable and sooner or later the rich oil resources would be depleted;
5-Exploitation of oil reserves that are estimated for a period of 100 years would severely plunge.
Estimates that have been made about Iran's reserves and confirmed by many experts indicate that under the status quo Iran could remain the second world oil exporter within OPEC only by maximum 2050.
The new achievement that Iran has obtained in the series of its success for the exploitation of its oil reserves is the oil discovery in Belal region that, according to estimates, would yield a daily output worth one million dollars.
Given that an agreement has been signed between Iran and the French Total on buy back basis for a period of 14 years, Iran would make about 30 billion dollars out of it. The contract would terminate in 2018.
The Belal region is situated 93 km west of the Lavan Island and Pars Gas would exploit about 293 million barrels of sweet gas and 117 million barrels of gas for industrial purposes out of the region.
Since 22 February 2004, some 40,000 barrels of crude oil have been produced in the Belal region and in order to optimize production about 50,000 barrels of water would be injected to the wells. The Belal region is situated in the neighborhood of Qatar.
Exploitation of Belal oil field is underway on the basis of six buy back contracts signed between the National Iranian Oil Company and the French Total. Meanwhile, the Canadian Bovali and the Italian Agip have also entered into cooperation with Iran for the exploration and exploitation of oil since April 1999.
No doubt, other regions and resources, in addition to the Caspian Sea wh,ere reserves are currently being estimated for exploitation, would be added to the list of the Iranian production group in a near future. Estimates have also been made in the past over the Iranian oil reserves that %80 have been close to the reality.
The Iranian oil reserves were estimated around 96.4 to 100 billion barrels of crude in the year 2000 (MEED 2001/2/13). Assuming that crude oil production amounted to about 4 million barrels in the same year, the conclusion could be reached that Iran's oil reserves would last for approximately 68 years. However, the above-mentioned figures did not include oil reserves in Dasht-e Azadegan, subject of a contract signed with the Japanese partner, as well as the Belal region. In addition to the volume of export that would be increased or lowered on the basis of different variables such as OPEC decision, oil price at the world market and adjustments in supply and demand, domestic consumption is growingly increasingly. In the year 2002, domestic consumption amounted to about 1.6 million barrels per day.
Assuming that population growth rate would be estimated at about % 1.6, the average per capita growth rate of non-oil gross domestic product at %5 and maximum consumption of non-oil products to gross domestic product at about % 1.1 to %1.3, the status of Iran's oil reserves would be as follows: Estimates in the first row have been made on the assumed consumption of 106 million barrels per day in the base year and those in the third row have been made on the basis of export of 2.4 million barrels per day during the mentioned period.
Given Iran's status in the world oil market, efforts should be made to develop mechanisms through which oil would be consumed for the manufacture of other export materials. To this end, the government is currently paying attention to the increase in the volume of investment in the petrochemical industry and improvement of products of this sector in an effort to find a proper substitute for oil that could address the country's foreign exchange demands in future.
Many researchers and experts believe that export of oil is tantamount to the export of the country's industries and capital. The value added for crude oil is not to the extent that could meet demands of a community with a population of 70 million which would make further growth in further to about 100 million in the year 2025.
Among other policies that the government has adopted in this regard is depositing surplus oil revenues in the Forex Reserve Fund. A glance at the balance of the fund, which has been similarly set up by other provident countries, would shed further light on Iran's approach towards guaranteeing sufficient hard currency resources in future to the extent that could meet the country's possible foreign exchange shortcomings.
Many believe that Iran could have used the opportunity that was provided in 1975-1976 simultaneously with the oil price hike in the word market for the formation of such a fund. But, unfortunately, not only such a step was not taken but for years the fate of the oil revenues remained in ambiguity and the money that was spent out of such revenues was never made public. Now, at the beginning of the 21st century, the decision for the formation of such a fund could promise a bright future for the country's economy.
The fundamental question that has come to the surface in recent years is that how revenues could be spent that not only it would not affect the economy by increasing rate of inflation but could prove effective in providing job opportunities and source of income, especially for the younger generation that constitute the major portion of the population.
However, the existing oil resources which could provide a suitable ground for economic development could solve the prevailing problems in a reasonable manner. The sound and calculated use of the revenues would prepare grounds for widespread investment activities in the industrial, agricultural and service sectors as well.
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Date: 2004-12-04 | Viewed: 1344
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