Iranian Oil Ministry head Mansour Bazmi said that Iran is constructing its first refinery capable of processing heavy crude oil on its Qeshm island in the Persian Gulf.
The refinery will have an output capacity of as much as 30,000 barrels a day of light oil products and will come online within the next two years, according to Bazmi.
The refinery’s throughput will come from Iran's Soroush and Norooz fields. The output of the two fields has a higher density than other grades, making the oil more difficult to refine and currently the fields’ output is only shipped to Asia and the Mediterranean. With the completion of the Qeshm refinery Iran would be able to sell refined oil products in both Asian and European markets, The Oil Ministry's news website Shana reported.
Iran is currently the Organization of Petroleum Exporting Countries' second-largest oil producer and began construction of the Qeshm refinery about six months ago.
Iran’s recoverable oil reserves are currently estimated at over 150 billion barrels with the volume of recoverable heavy and super heavy crude estimated at over 70 billion barrels.
Complicating the picture, many light crude Iranian oil fields including Ahwaz, Maroun, Aghajari, Bibi-Hakimeh, Gachsaran, and Pazanan are in decline.
By. Charles Kennedy, Deputy Editor OilPrice.com
Charles is a writer for Oilprice.com