BAKU, Azerbaijan, Nov. 11
By Leman Zeynalova – Trend:
No international company is likely to show an interest in Iran’s newly announced oil discovery, Cyril Widdershoven, a Middle East geopolitical specialist and energy analyst, a partner at Dutch risk consultancy VEROCY and SVP MEA-Risk, told Trend.
Iran’s President Hassan Rouhani announced on Nov.10 that the country has discovered a new oil field with 53 billion barrels of crude in Khuzestan province.
Iran currently has the world’s fourth-largest proven deposits of crude oil and the world’s second-largest deposits of natural gas.
The new oil field could become Iran’s second-largest field after one containing 65 billion barrels in Ahvaz. The field is 2,400 square kilometers (925 square miles), with the deposit some 80 meters (260 feet) deep.
“The discovery is of importance, as it reiterates that Iran holds more oil (and gas) reserves in theory than currently is being stated officially. The latter 53 billion barrels of oil, which increases total of Iran by almost 33 percent is significant,” said the expert.
However, Widdershoven believes that there are however main questions to be answered.
“Why did this discovery happen right now? Looks like there is still a historical approach, which has been put in place by mainstream OPEC members to unilaterally increase their national oil reserves by stating new discoveries. Analysts, such as me, are wondering why the latter discovery has been presented right now, as it looks it is a major reserve very shallow underground. No real hard discovery to be made, just an almost simple geological research would have shown it already. To have this now done, it looks like it is a strategic statement by Tehran to attract again interest from abroad, at a time that the whole world is looking at the impact and assessments of the Aramco IPO,” noted the expert.
At the same time, according to Widdershoven, it is still unclear which kind of oil Iran is talking about. “If this is a major discovery, very undeep, it looks like we are talking about heavy to very heavy oil reserves. The latter is capital intensive and not easy to be taken as a real attractive reserve.”
For sure, Iran has been able to get attention by this discovery, he noted.
“The size is extreme, so interest is there. Looking at the crude quality, so are we talking about qualities interesting to the market, than interest will be there for sure. However, if looking at current statements which points at heavy crude, interest will be still there but low.”
All-in all, it only increases reserves potential of Iran, not yet a real issue that will open more FDI for Iran from abroad, according to Widdershoven.
“With the current market, US shale, OPEC overproduction and global markets, in combination with geopolitics and sanctions, no international oil company will have an inclination yet to burn its fingers and enter Iran for this new potential. For the future, it will be interesting, but at present too many hickups on the road.”
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