Iran Makes $100 B Oil Find, Major Companies Compete For Big Deals

Iran Makes $100 B Oil Find, Major Companies Compete For Big Deals Iran announced its biggest oil find in 30 years last week, a 26-billion barrel field discovered just as the country drives to revive exploration activities and foreign firms compete for big deals. Oil Minister Bijan Zanganeh said the oilfield in the prolific southwest Khuzestan province has the potential to produce up to 400,000 bpd. He said that development on the field, which is close to the Iraqi border, will start by the end of March 2001 and could earn revenues of some $100 billion given current estimates of recoverable reserves. The massive discovery by the National Iranian Oil Company comes under renewed Iranian efforts to rejuvenate exploration activities in a country with the world's second largest natural gas reserves and fifth biggest oil reserves. "Exploration had been neglected for 20 years. Recently there has been a great deal of exploration effort and this find shows that Iran is still under-explored," said Iranian oil expert Manouchehr Takin of London's Center for Global Energy Studies. "It underscores that Iran still has the potential for big discoveries." Oil Majors Vying For Iran Business That potential is one of the incentives now driving major Western oil firms to compete for big deals under Iran's biggest energy opening since the 1979 Islamic revolution. Companies are vying for over 40 projects, although progress is slow, bogged down by red tape and some domestic opposition from conservative factions. So far Iran has only awarded a handful of projects to foreign companies in offshore projects that are politically less sensitive. France's Elf and TotalFina, which are to merge soon, lead the way, and Royal Dutch/Shell is widely tipped to bag the next deal. The area of the field reportedly covers 200 sq. miles - 55 sq. km long and 9.5 sq. km wide. Consultants in London said they believed the find was based on results from drilling at a well called Nir Kabir-1, one of only four wells being drilled onshore Iran at the moment. The field has been named Azadegan, or the Freed Ones in Farsi, in reference to the Iranian prisoners of war released by Iraq after their 1980-1988 war. Iranian expert Mehdi Varzi of Dresdner Kleinwort Benson Bank said the size of the discovery highlights the fact that world oil reserves remain plentiful, even though oil prices now are unusually high. "There is no shortage of oil. Discoveries of this kind, with Kuwait's opening about to happen and post-sanctions investment in Iraq just around the corner, serve to remind us that high oil prices are just a short-term phenomenon."