Oil and gas in Iran

Overview

• Iran holds the world’s fourth largest proved crude oil reserves and second largest natural gas reserves.
• Crude oil production has substantially declined, and natural gas production growth has been slower than expected in recent years.
• Iran consumed approximately 244 million toe of primary energy in 2013.
• Natural gas and oil accounted for 98% of Iran’s total primary energy consumption in 2013.
• Iran is the second largest oil consuming country in the Middle East.
• Iran’s primary energy consumption has grown by almost 50% since 2004.
• The first phase of Iran’s energy reform was implemented in 2010 and the second in 2014.
• The Iranian constitution prohibits foreign or private ownership of natural resources.
• Iran is one of the founding members of OPEC.
• Energy prices are subsidised, particularly gasoline prices.

Sanctions

• International sanctions have stymied progress across Iran’s energy sector.
• Sanctions have prompted a number of cancellations and delays of upstream projects.
• The sanctions impede Iran’s ability to sell oil, resulting in a near 1 million bpd drop in crude oil and condensate exports in 2012 compared with 2011.
• Between fiscal year 2011/2012 and 2012/2013 oil and natural gas export revenue dropped by 47%.
• In the 2013/2014 fiscal year it fell by a further 10%.
• Sanctions have also impacted Iran’s natural gas sector.
• Natural gas production growth has been lower than expected due to a lack of foreign investment and technology.
• In recent years there has been progress made during negotiations to end sanctions.
• Crude oil and condensate exports dropped from 2.6 million bpd in 2011 to 1.3 million bpd in 2013 as a result of sanctions.
• In 2014, exports increased by approximately 150 000 bpd to 1.4 million bpd.

Oil

• Iran holds approximately 10% of world crude oil reserves and 13% of OPEC reserves.
• 70% of crude oil reserves are located onshore.
• As of January this year, Iran had approximately 158 billion bbls of proved crude oil reserves.
• It is thought that 80% of Iran’s reserves were discovered before 1965.
• Iran produced 3.4 million bpd of petroleum and other liquids in 2014.
• Most of Iran’s crude oil is generally medium in sulfur content.
• The largest buyers of Iranian crude oil and condensate are China, India, Japan, South Korea and Turkey.
• Iran exported approximately 300 000 bpd of petroleum products in 2014.
• Oil terminals in Kharg, Lavan and Sirri Islands handle almost all of Iran’s crude oil exports.

Natural gas

• Iran holds 17% of the world’s proved natural gas reserves and more than one third of OPEC’s.
• The South Pars gas field is estimated to hold approximately 40% of Iran’s gas reserves.
• Most of Iran’s natural gas reserves are undeveloped.
• Iran is the world’s third largest dry natural gas producer.
• Iran trades margin amounts of natural gas regionally via pipelines.
• There is no infrastructure in place to import or export LNG.
• Iran accounts for less than 1% of global natural gas trade.
• Iran exports natural gas to Turkey, Armenia and Azerbaijan.