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Iran Oil Production and Consumption
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By OilGasArticles Editor
Published on 04/22/2006
 
With sufficient investment, it is widely believed that Iran could increase its crude oil production capacity significantly. Iran produced 6 million bbl/d of crude oil in 1974, has not come close to recovering to that level since he 1978/79 Iranian revolution. Still, Iran has ambitious plans to increase national oil production - to more than 5 million bbl/d by 2010, and 8 million bbl/d by 2015. The country is counting on billions of dollars in foreign investment to accomplish this, but the goal is unlikely to be achieved without a significant change in policy to attract such investment (and possibly a change in relations with the West).
Iran is OPEC’s second largest oil producer
Iran is OPEC's second largest oil producer and holds 10 percent of the world's proven, conventional world oil reserves. Most oil is located in the southwestern part of Iran, near the Iraqi border and Persian Gulf.

According to the Oil and Gas Journal, Iran held 125.8 billion barrels of proven oil reserves as of January 1, 2005, roughly 10 percent of the world's total. In July 2004, Iran's oil minister noted that the country's proven oil reserves had increased to 132 billion barrels following discoveries in the Kushk and Hosseineih fields of Khuzestan province.

The vast majority of Iran's crude oil reserves are located in giant onshore fields in the southwestern Khuzestan region near the Iraqi border (note: in September 2005, several bombs were detonated near oil wells in Khuzestan, raising concerns about unrest amongst ethnic Arabs in the region).  Overall, Iran has 40 producing fields - 27 onshore and 13 offshore (see table below for major fields). Iran's crude oil is generally medium in sulfur, with gravities mainly in the 28-35 API range. 

During 2005, Iran has been producing about 4.2 million bbl/d of total oil (of which 3.9 million bbl/d is crude oil), up nearly 400,000 bbl/d from 2003. Iran's current sustainable crude oil production capacity is estimated at 4.0 million bbl/d, which is around 100,000 bbl/d below Iran's latest (July 1, 2005) OPEC production quota of 4.110 million bbl/d. Some analysts believe that Iran's capacity is lower, and that it could fall even further until new oilfield developments (Azadegan, Bangestan - see below) come online in a few years.

Iran's existing oilfields have a natural decline rate estimated at 8-13 percent per year (300,000-500,000 bbl/d). The fields are in need of upgrading, modernization, and enhanced oil recovery efforts (i.e., gas reinjection), with current recovery rates at just 24-27 percent (compared to a world average of 35 percent). Iran also needs to increase its search for new oil, with only a few exploration wells being drilled in 2005.

Source: Energy Information Administration