The Future of Iran's Oil and Its Economic Implications
Abstract/Contents
- Abstract
- The unprecedented global support for policies to reduce carbon emissions along with the emergence of new technologies for extraction of oil from unconventional resources have made it increasingly unlikely that Iran’s oil reserves will ever be exhausted. As such, determining the real amounts of Iran’s oil endowments and reserves – which have long been a subject of controversy – is of little practical value now. Rather, focus should be devoted to assess the rate at which Iran can recover oil given its mature fields and underinvested infrastructure. Herein, we present a field-by-field analysis of Iran’s crude oil production history and its future projections to 2040. A total of 98 oil fields and reservoirs with a cumulative production of 72 billion barrels since 1913 are considered. Future projections are made based upon the current status of active fields and their existing infrastructure, ongoing and announced projects, and potential production augmentations from undeveloped and undiscovered fields. We found the average annual decline rate of the existing Iranian oil fields (including the impact of maintenance) to be 6.0%, the average productivity of new wells in 2016 to be 1.7 kbbl/d with a year-over-year decline rate of 3.2%, and the average yield from gas injection to be 4.0 kbbl/mcm. We also show that, in the most likely scenario, Iran’s crude oil production capacity will increase moderately over the coming decades to first reach 4.0 mmbbl/d before 2020, followed by a further increase to 4.4 mmbbl/d before 2030, which can potentially last until 2040 if future exploration and enhanced oil recovery projects are implemented successfully. Using the baseline crude price projections by the US Energy Information Administration (EIA), we project that the annual gross revenue of Iran’s crude oil will reach its 2011/12 figure of about $150B (in constant 2016$) by the middle of the next decade. Our analysis indicated that, until the middle of next decade, Iran can continue to compensate for the decline in production of its mature fields by exploiting its undeveloped reserves. However, major challenge will come into play from the middle of next decade where retaining the production level will only be possible through operation of many more wells, injection of increasing shares of the produced natural gas, use of artificial lift, and heavy investment in secondary and tertiary recovery practices. Despite the expected growth in gross revenue, the increasing production costs due to the abovementioned factors along with future rise in domestic energy consumption will prohibit considerable growth in oil export profit after 2025.
Description
| Type of resource | text |
|---|---|
| Date created | October 2016 |
Creators/Contributors
| Author | Azadi, Pooya |
|---|---|
| Author | Dehghanpour, Hassan |
| Author | Sohrabi, Mehran |
| Author | Madani, Kaveh |
Subjects
| Subject | Iran |
|---|---|
| Subject | Oil |
| Subject | Future |
| Subject | Stanford Iran 2040 Project |
| Subject | Hamid & Christina Moghadam Program in Iranian Studies |
| Genre | Technical report |
Bibliographic information
| Related item | |
|---|---|
| Location | https://purl.stanford.edu/mp473rm5524 |
Access conditions
- Use and reproduction
- User agrees that, where applicable, content will not be used to identify or to otherwise infringe the privacy or confidentiality rights of individuals. Content distributed via the Stanford Digital Repository may be subject to additional license and use restrictions applied by the depositor.
Preferred citation
- Preferred Citation
- P. Azadi, H. Dehghanpour, M. Sohrabi, K. Madani, The Future of Iran’s Oil and Its Economic Implications, Working Paper 1, Stanford Iran 2040 Project, Stanford University, October 2016, https://purl.stanford.edu/mp473rm5524
Collection
Stanford Iran 2040 Project
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- Contact
- pazadi@stanford.edu
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