The potential for investment in oil and natural gas projects in central parts of Iran is projected to exceed $11 billion, managing director of Iranian Central Oil Fields Company said on Wednesday.
"Oil price crashes will never result in ceasing oil industry's development plans, as final production costs are still low," Salbali Karimi was quoted as saying by Mehr News Agency.
According to Karimi, plans have been made to raise the current crude production capacity in the country's central oilfields, currently standing at 100,000 barrels per day, to 150,000 in the first phase and then to 200,000 bpd during the second phase of a development plan.
Underscoring the fact that in the sixth five-year economic development plan (2016-21), Iranian Central Oil Fields Company targets crude production of 350,000 bpd, the official added, "In addition to undertaking development projects, implementation of techniques for increasing the amount of crude oil that can be extracted from an oilfield tops ICOFC's operational agenda."
Referring to the extractable in-place crude reserves in central parts which surpass 10 billion barrels, he noted that based on projections, extractable gas reserves in the same area stands at 7 trillion cubic meters.
"In order to curb expenses and manage financial resources, the number of active drilling rigs will decrease from 22 to 12 by the end of the current Iranian year (ending March 19, 2016)," he said.
Karimi noted that the price decline will naturally overshadow giants' interest in investment, yet the market needs to be analyzed carefully to be able to maximize profit margins.
"Eliminating energy from everyday life is impossible, as it is an absolute necessity," he said, adding that low oil prices are a blessing in disguise to attract more investors to Iran's oil and gas sector.
The official said the National Iranian Oil Company has never been in favor of low oil prices, but the drastic plunge in prices can persuade more investors to invest in Iran's oil industry as production costs are low.
The cheapest oil to produce comes from Kuwait, where each barrel costs $8.50. Saudi Arabian crude costs $9.90 a barrel and Iraqi crude costs $10.70 a barrel to get them out of the ground. The data were compiled by energy research firm Rystad Energy and reported on Monday at CNN Money.
"In some Iranian oilfields, especially in central parts, the final cost of producing each barrel can be as low as $1," Karimi said.
"Production-wise, the least expensive crude in the world can be produced in Iran's central areas that are rich in oil and gas resources."
Here is Rystad Energy’s list of finished production costs for the 20 largest oil-producing countries. Production costs are a combination of capital and operating costs, based on a survey of some 15,000 oilfields across 20 countries.
Rystad Energy, headquartered in Oslo, Norway, is an independent oil and gas consulting services and business intelligence data firm offering global databases, strategy consulting and research products.
