Overview of Iran’s Oil and Gas Industry

A comprehensive overview of Iran’s oil and gas industry, including key points related to companies, major projects, and technological needs across various sectors.

Crude Oil

Reserves and Production

With 156 billion barrels of proven oil reserves, Iran ranks fourth globally. Daily production fluctuates between 2.9 to 3.3 million barrels, depending on sanctions and export capacity. During non-sanctioned periods, crude oil exports can exceed 1.5 million barrels per day.

Key Fields

Major activity is concentrated in the Khuzestan, Bushehr, and Kohgiluyeh-Boyer Ahmad provinces. Key oil fields include:

  • North and South Azadegan Fields: This is Iran’s largest oil field with 33 billion barrels of reserves. It is under development by the National Iranian Oil Company (NIOC) and in partnership with Chinese companies like CNPC.
  • Ahvaz Field: Iran’s second-largest field, producing over 700,000 barrels daily.
  • Gachsaran Field: One of Iran’s oldest fields, it has significant reserves and produces over 600,000 barrels per day.

Development Projects

  • Integrated Oil Projects (IOP): A $6 billion initiative aimed at enhancing production in 33 oil fields.
  • West Karun Project: This project involves developing the Azadegan, Yadavaran, and Yaran fields to boost total production capacity to 1 million barrels per day.

Technological Needs

To maintain and increase production levels, Iran’s oil industry requires:

  • Advanced horizontal and multilateral drilling technologies.
  • Enhanced Oil Recovery (EOR) equipment to increase recovery from mature fields.
  • Sophisticated seismic imaging tools for more precise exploration.

Natural Gas

Reserves and Global Standing

Iran holds the second-largest proven natural gas reserves globally, with over 34 trillion cubic meters, accounting for 18% of the world’s reserves. Daily production is approximately 1 billion cubic meters, which is used for both domestic consumption and exports.

Key Production Areas and Exports

The majority of Iran’s gas production comes from:

  • South Pars Gas Field: This is the world’s largest gas field, shared with Qatar, and it accounts for over 70% of Iran’s total gas production. It has been developed by companies like Petropars, and formerly Total and CNPC.
  • The Kangan, Nar, and Asaluyeh fields are also major production centers.

In the export sector, major customers include Turkey (via pipelines), Iraq, and Armenia. However, Iran’s LNG export capacity is limited due to a lack of advanced technology.

Major Projects

  • South Pars Phases 11-24: Aimed at increasing the daily production capacity to 750 million cubic meters.
  • Peace Pipeline Project: This project, planned to transport gas to India and Pakistan, has stalled due to political challenges.

Technological Needs

  • Liquefied Natural Gas (LNG) technologies to expand export potential.
  • Advanced compressors and gas processing equipment.
  • Monitoring and control systems for efficient gas network management.

Petrochemicals

Capacity and Importance

Iran’s petrochemical industry operates 60 active complexes with a total annual production capacity of over 90 million tons. Annual exports exceed $12 billion, primarily targeting Asian and European markets.

Products and Production Hubs

Iran holds a significant position in the production of specific products, including Methanol, for which it is the second-largest global producer. Polymers, urea, and ammonia are other key products.

The main production hubs are:

  • Special Economic Energy Zone (Assaluyeh) as the primary hub.
  • Mahshahr and Bandar Imam Khomeini, which are critical centers for production and export.

Companies and Projects

The industry’s development is planned by the National Petrochemical Company (NPC). Private firms like Zagros Petrochemical and Persian Gulf Petrochemical Industries Company are also active. Notable projects include the Hegmataneh Petrochemical Plant (producing medical-grade PVC) and expansion projects at the Bandar Imam Petrochemical Complex to increase high-value-added products.

Technological Needs

  • High-performance polymer production equipment.
  • Advanced catalytic technologies to increase efficiency.
  • Energy-saving and industrial water treatment systems.

Refining and Distribution

Refining Capacity

Iran has a crude oil refining capacity of 2.3 million barrels per day. The country can produce over 110 million liters of gasoline daily, meeting Euro 4 and Euro 5 standards.

Key Refineries

  • Abadan Refinery: The oldest refinery in the Middle East, with a refining capacity of 400,000 barrels per day.
  • Persian Gulf Star Refinery: As the world’s largest gas condensate refinery, it produces 40 million liters of gasoline daily.
  • Arak (Imam Khomeini) Refinery: Specializes in producing diverse products, including jet fuel and kerosene.

Distribution System and Development Projects

Iran has an extensive pipeline network spanning 14,000 kilometers for product distribution and exports products to neighboring countries such as Afghanistan and Pakistan. Key development projects include the Anahita Refinery Project in Kermanshah to address western Iran’s needs and upgrades to existing refineries to reduce heavy fuel oil output and enhance fuel quality.

Technological Needs

  • Desulfurization technologies and systems for producing environmentally friendly fuels.
  • Modern equipment for gas condensate refining.
  • Smart energy monitoring and management systems.

Challenges and Opportunities

Iran’s oil and gas industry faces several challenges and opportunities:

  • Competition in export markets, particularly in Asia and Europe.
  • The need for modernization of aging infrastructure and reduction of energy loss.
  • Opportunities for partnerships with foreign companies to access cutting-edge technologies.
  • Development of petro-refining projects to increase value-added production.
  • Potential to expand gas exports to European and Asian markets.

Outlook

The future of Iran’s energy industry will focus on:

  • A strong focus on developing shared fields, such as South Pars and Azadegan.
  • Upgrading LNG technologies to expand global gas exports.
  • Strengthening partnerships with international firms to enhance infrastructure and reduce reliance on imports.