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10 Nov, 2019 11:43

Iran discovers massive oilfield that can boost its national reserves by third

Iran discovers massive oilfield that can boost its national reserves by third

A new oilfield with over 50 billion barrels of crude oil has been discovered in the south of Iran. The site could become the country’s second largest oilfield and significantly increase Iran’s proven deposits.

“I inform the White House that, in the days that you have imposed sanctions on Iran’s oil exports, workers and engineers of the country have discovered 53 billion barrels of in-place oil reserves,” President Hassan Rouhani announced on Sunday, as cited by Fars news agency.

He said that it took the National Iranian Oil Company three years to discover the giant oil field located in the oil-rich Khuzestan province. The field stretches from Bostan to Omidiyeh and covers an area of 24,000 square km (9266 square miles).

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The Islamic Republic’s proven crude reserves stood at 155.6 billion barrels in 2018, and the newly discovered site would boost that figure by a third. However, it is not clear how much will be economically feasible to extract.

Iran holds some of the world’s largest deposits of proved oil and natural gas reserves, ranking as the world’s fourth-largest and second-largest reserve holder of oil and natural gas, respectively. The country’s largest oil field in Ahvaz, located in the same region as the newly-discovered one, is considered one of the three largest oil fields in the world in terms of production and has initial oil deposits of over 65 billion barrels.

Tehran’s oil sector has been hit hard by US sanctions since Washington decided to withdraw from the landmark 2015 nuclear deal in 2018. Among other punitive measures, the US has sought to bring Iranian crude exports to zero and recently ended exemptions granted to buyers of Iranian oil, meaning those who continue to purchase it may face secondary sanctions.

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As part of the efforts to save the nuclear accord, the European Union has been working on a financial channel called INSTEX to help companies to skirt the restrictions. Despite assertions from Brussels, however, Tehran has said that the launch of the mechanism lacks progress.

Iran has been gradually scaling back its nuclear commitments under the deal, although it remained in full compliance for some time after the US abandoned it. The Islamic Republic has vowed to further reduce its obligation-fulfilment if other signatories, and Europe in particular, fail to do enough to salvage the treaty.

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