More Shale Oil Discovered in Iran

More Shale  Oil Discovered in Iran
More Shale  Oil Discovered in Iran

Preliminary explorations in Kerman Province and southern parts of Semnan Province have indicated considerable shale oil resources in the regions.

Three to four shale layers were discovered in parts of the eastern Kerman and Semnan provinces, wherein significant amounts of organic materials were identified, IRNA reported, citing a source with knowledge of the matter.

Garu formation in Lorestan Province and Kazhdomi formation in Gachsaran, Kohgilouyeh-Boyerahmad Province contain potentially viable oil shale deposits that are deemed to be the richest source rocks of the Lorestan basin.

Shale gas was previously discovered in the west of Iran, but the volume of recoverable shale has yet remained unknown. There are reportedly shale oil and gas reserves in the south as well. 

Shale oil is an unconventional oil resource produced from fragments of rock. It is a type of petroleum produced or extracted using techniques other than the conventional (oil well) method. There has been increasing investments in unconventional oil resources in the past decade due to the scarcity of crude reserves.

Shale oil and gas is extracted via a process called hydraulic fracturing, or fracking. It is the process of drilling and injecting fluid into the ground at a high pressure to fracture shale rocks to release natural gas inside.

The National Iranian Oil Company has brought into focus exploration of non-conventional hydrocarbon reserves in the current Iranian year (began March 21). The NIOC, however, lacks advanced technology to conduct seismic survey for shale exploration, and thus, negotiations were held on transfer of technology by European companies.

The cost of producing one barrel of shale oil/gas is estimated at $40-80, while production from conventional resources in the Persian Gulf costs approximately $5-10 per barrel.

Therefore, Iran does not intend to produce shale oil and gas, given the country's abundant conventional petroleum resources, and also the pattern of tumbling oil prices in recent months, which has rendered extraction and production of shale oil economically unviable.