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Why The Oil Rally Isn’t Over Yet

Why The Oil Rally Isn’t Over Yet

OPEC+ output cuts and several…

Iran Announces Oil Discovery In Untapped Region

Bijan Zanganeh Iran

Iran has struck oil in a hitherto untapped region, Oil Minister Bijan Zanganeh told local media as quoted by Reuters.

“This is the first time we’ve reached oil in the Abadan region,” Zanganeh said, adding that the grade was very light and sweet, but giving no details regarding the amount of reserves contained in the reservoir.

Iran has continued to pursue new oil production opportunities despite U.S. sanctions that have reduced its crude oil exports significantly although probably not as significantly, to date, as planned. As of December, Iran was shipping some 1.3 million bpd abroad, the International Energy Agency said in its latest Oil Market Report.

What’s more, Tehran still has partners willing to help with the exploration and production growth. Earlier this month, China’s largest crude oil refiner, Sinopec, offered US$3 billion to Iran’s state oil company, NIOC, to jointly expand the development of a major field in Iran, the Wall Street Journal reported, citing sources in the know.

The sources, who wished to remain unnamed, said the Chinese company considered the offer safe from the sanctions the United States reimposed on Iran last November because the initial deal for the development of the Yadavaran field was inked back in 2007.

Sinopec has already invested US$2 billion in the development of Yadavaran, with production there standing at 115,000 bpd, while North Azadegan, operated by NIOC and CNPC, started production at a rate of 75,000 bpd two years ago.

Last year, a senior Iranian official said Russia, too, is prepared to invest a lot of money in Iran’s oil and gas industry. One oil company had already, in July, signed a deal to invest US$4 billion on Iranian oil projects, with Rosneft and Gazprom also in talks with the Iranian energy ministry on potential deals that could be valued at up to US$10 billion.

By Irina Slav for Oilprice.com

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