Financial Constraints Hinder Caspian Oilfield Progress

Financial Constraints Hinder Caspian Oilfield Progress Financial Constraints Hinder Caspian Oilfield Progress

Completion of the Sardar-e Jangal oil field in eastern Gilan is almost impossible due to technological and financial constraints and was rejected by the government. Furthermore, it also is not a priority of the oil ministry so long as there are important unfinished projects to be taken care of, Tasnim news agency quoted Abouzar Nadimi, a Gilan lawmaker as saying Monday.

Pointing to the depth of exploration, he added,” Drilling in this site will not be viable due to colossal costs, save for foreign companies’ partnership and the private sector involvement.”

“The northern flank of the Caspian Sea is much shallower than the (southern) regions from which Iran can and wants to extract oil,” Nadimi said, reiterating that when oil and gas reserves decline, the entire operation will spell an environmental disaster.

The Sardar-e Jangal field is an Iranian natural gas field that was discovered in 2012. The total proven reserves of the field, according to the oil ministry, are around 50 trillion cubic feet (1,430×109m³); however, estimates later put the known reserves at 5 trillion cubic feet.  Drilling the first oil well at the depth of 2500 meters ended in May 2012 and it is estimated to contain 2 billion barrels of oil in place, out of which 500 million barrels can be extracted, Fars news agency reported.

Given the drilling progress in the second well at a depth of 3500 meters, early feasibility studies by Naft-e-Khazar Co. found out that it would be possible to extract up to 20,000 barrels per day from this field in five years.

Iran is conducting exploratory drilling in new areas in the Caspian Sea with the aim of discovering new fields, the news agency quoted people with direct knowledge of the matter as saying on Monday.

Elaborating on the new exploration the unidentified source added,” This block is named ‘8-1’ and not only is it situated in a different area from the Sardar-e-Jangal oil site, but also is deeper and geologically differs from the previous site. The depth of the well to be drilled will be 5000 meters and the entire operation will be carried out by the Iranians.”

Due to the abundance of gas resources in southern Iran, officials have been indifferent to exploration and expansion of oil fields in the northern regions. However, the Rouhani administration, after taking office in the summer of 2013, has shown special interest in the natural energy basins in the Caspian region.

The Caspian Sea region, which includes Russia, Azerbaijan, Kazakhstan, Turkmenistan, Uzbekistan, and Iran, is one of the oldest oil-producing areas in the world and is an increasingly important source of global energy production. The area has significant oil and natural gas reserves from both offshore deposits in the Caspian Sea itself and onshore fields in the region. Traditionally an oil-producing area, the Caspian area’s importance as a natural gas producer is growing quickly. Offshore fields account for 41% of total Caspian crude oil and lease condensate (19.6 billion barrels) and 36% of natural gas (106 Tcf). In general, most of the offshore oil reserves are in the northern part of the Caspian Sea, while most of the offshore natural gas reserves are in the southern part of the Caspian Sea.