When senior government officials in either Iran or Russia say the two countries are now experiencing a “golden age” of developing relations between the two countries, one or more countries somewhere are immediately in serious trouble. Iran’s Oil Minister Javad Owji’s comments were echoed by a senior Russian official. Apart from the military cooperation between the two that the world has recently seen with Russia’s use of Iranian drones against civilian targets in Ukraine, there are several areas of cooperation, among others. Plans specifically related to the oil and gas sector. In addition to the endless possibilities of circumventing sanctions against Russia and Iran, Iran’s influence over Iraq has given Tehran and Moscow my latest book on global oil markets, the two energy superpowers could control most of the world’s oil and gas supply if they so wished. Iran has an estimated 157 billion barrels of proven oil reserves, nearly 10% of the world’s total and 13% of OPEC’s reserves. Similar to oil reserves, gas reserves are even greater, with Iran’s probable natural gas reserves of 1,193 trillion cubic feet (Tcf), second only to Russia, 17% of the world’s total, and one-third of the world’s. accounts for more than 1 of OPEC. Russia not only holds the world’s largest natural gas reserves of 1,688 Tcf, but also has proven oil reserves of at least 80 billion barrels, making it one of the top three oil producers for many years. Yes, and could easily produce at least 10.5 million barrels per day. of petroleum and other liquid fuels.
One of the factors constraining Iranian crude oil production is the low yield from the oil fields, which has hovered in the 4-5% range for many years. This is not a function of retrieval difficulty. In fact, crude oil from most of Iran’s oilfields is as easy as crude oil from Iraq and Saudi Arabia, the other world’s most productive oilfields. Domestic lifting costs -2 lbs. Rather, this low recovery rate is a function of the sanctions that have been in place since the US Embassy hostage crisis that began in 1979. These sanctions were tightened again after the United States unilaterally withdrew from the Joint Comprehensive Action Plan (“JCPOA”, colloquially “Nuclear Agreement”), May 2018.
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These sanctions have deprived Iran of access to the latest technology and equipment needed to improve oil recovery rates. Companies associated with Iran’s Islamic Revolutionary Guard Corps have been broadly entrusted with doing the best they can with the equipment they have. It should be noted that in the period leading up to the JCPOA, which was formally announced on July 14, 2015, top international oil companies were about to sign development agreements with Iran. The field will be at least 12.5% within 12 months and at least 25% after 12 months.
With free access to Russian technology and equipment, Iran should be able to significantly improve oil recovery rates over the years. Preparations for such a contingency were made by Russia and Iran before Russia invaded Ukraine on February 24, 2022. article OilPrice.com At that time, Iranian President Ebrahim Raisi visited the president in Moscow. This is the Iranian president’s visit to Russia and his first in nearly five years. Iranian Oil Minister Javad Owji has commented that some parts of his 20-year cooperation agreement between Russia and Iran relate to the development of oil and gas fields, the construction of oil refineries and the transfer of technology. has been signed.
The foundation for this was then laid in July by Russian President Vladimir Putin’s mutual visit to Tehran. This concludes his US$40bn far-reaching Memorandum of Understanding (MoU) signed a few days ago between the state-owned Iranian Oil Company (NIOC) and the Russian gas giant Gazprom. Among other deals included in the MoU, Gazprom has invested in NIOC in the US$10 billion development of the Kish and North Perth gas fields with a view to producing more than 10 million cubic meters of gas per day. pledged full support to The memorandum also details a US$15 billion project to increase pressure on the super-massive South Perth gas field on the Iran-Qatar maritime border. Pledged support for the construction of gas export pipelines.
Before the US withdrew from the JCPOA in 2018, Moscow was on the verge of taking over several new major oil and gas projects in Iran. Initial contracts were signed by GazpromNeft for the Changouleh and Cheshmeh-Khosh feasibility studies, Zarubezhneft for the Aban and Paydar Gharb fields and Tatneft for the Dehloran field. These are in addition to his previous MoU signed by Lukoil and his NIOC for research on his Ab Teymour and Mansouri fields, as a result of which the Russian company assigned his seven field studies. more than any other country at that time. These deals were just part of his very far-reaching 22-point MoU signed at the time by Iran’s deputy oil minister, Amir Hossein Zamania, and Russia’s deputy energy minister, Kirill Morozov. did not. This includes gas transfer, petrochemical swap business, research on petrochemical supply and marketing, petroleum equipment manufacturing in cooperation with local Iranian engineering companies, and technology transfer in the refining sector.
Concomitantly, Russia also plans to dramatically expand its operations in neighboring Iraq, where some of the world’s major oil reservoirs are shared between Iran and Iraq. In late 2020, Gazprom Neft, Gazprom’s oil production subsidiary, announced plans to launch his fourth oil well in the first half of 2021 at the Sarkara field in the Kurdistan Region of Iraq (KRI). Regarding exploration and production, Vadim Yakovlev said at the time: It is unclear if this still applies to the adjacent Shakal block, where Gazprom Neft holds an 80% stake and the rest is owned by KRG, where the company has drilled three wells so far. It is clear that Russia’s state-owned oil giant Rosneft still effectively controls the KRI’s oil sector. my latest book on global oil markets.
Such a pan-Iraqi opportunity for Russia is why, despite recent setbacks, Gazprom Neft will continue in Badra and look for further opportunities north and south of Iraq. These plans were set in motion between Russia and Iraq in 2020, when President of Russia’s state oil agent Lukoil, Vaghit Alekperov, met his one-on-one meeting with Iraq’s then-Prime Minister Mustafa Al-Kadhimi. It was part of a broader discussion about further cooperation. – Oil Minister Ihsan Abdul Jabbar Ismail. At the meeting, Russia pressed Iraq to make decisive progress on a series of agreements agreed between the two countries in 2017. Several companies, including Zarbezhneft, Tatneft and Rosneft-related oil and gas entities, are poised to move to at least $20 billion oil and gas projects in Iraq in the near future. Zarubezhneft (and Iranian private company Dana Energy) have signed a US$742 million contract to boost production at the Aban and Paydar fields in Iraq’s Ilam province near the border with Iran.
Around the same time, a preliminary deal was agreed in Iran for Tatneft to develop Defloran, Lukoil to expand its oil operations to Abu Teemore and Mansouri, and Gazpromneft to do the same in Changole and Cesme Kosh. In the latter two cases, both companies already have functioning operations in southern Iraq, with Lukoil operating in the 14 billion barrel West Qurna 2 field and Gazprom subsidiary GazpromNeft with 30 We are active in the 100 million barrel Badra oil field (Iranian side). It’s Changouleh in shared fields). His Bashneft, a subsidiary of Rosneft, also operates in Block 12 in southern Iraq.
By Simon Watkins of Oilprice.com
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