Iranian Deputy Oil Minister - Era of Cheap Oil is Over

Iran’s deputy Oil Minister Ghazaleh Taifeh stated bluntly, "The era of cheap and low-cost oil production in Iran, which was always considered the most important advantage of Iran's oil industry, has come to an end. To maintain oil production $5 billion is being invested this year."

Iranian oil experts believe that in order to keep its 14-percent OPEC share Iran has to turn to the use of new technology and new investment, Tehran’s Donya-ye Eqtesad reported.

The uncomfortable fact for Iran’s Oil Ministry is that 80 percent of the nation's oil fields are in the second half of their lives and their subsequent and persistent annual drop-off have again sounded the alarm of falling oil field recovery, thus causing the injection of $5 billion this year to maintain oil production. One energy expert, speaking anonymously, said, "With the failure to increase the oil fields recovery coefficient the nation's overall economic interests are being destroyed."

Oil Ministry official Mohsen Khojasteh-Mehr said, "To accomplish the program of maintaining oil production capability, for the last year or two it has been deemed essential to comply with technical and financial requirements and especially the procurement of goods, equipment and drilling shafts. The most important requirement for maintaining oil production capability is attention to flow characteristics and field production mechanisms, especially in fields that have been producing for more than three decades."

By. Joao Peixe, Deputy Editor OilPrice.com