“The National Iranian Oil Company (NIOC) has announced the discovery of a huge oil field with considerable crude reserves in southern Iran. NIOC’s Director for Exploration Seyyed Mahmoud Mohaddes said Saturday that an exploratory oil well has already been drilled in the area. “The newly-discovered oil field must be considered among the biggest fields ever discovered in Iran,” he said. The Iranian official also added that initial tests have indicated the high quality of the oil in the new field. Mohaddes went on to say that the details about two or three more oil fields will be announced in the near future. A total of 18 heavy and extra heavy oilfields have so far been discovered in Iran, including Ferdowsi oil field in the Persian Gulf, which is one of the country’s biggest heavy oil fields with proven reserves of more than 31 billion barrels. Iran’s total in-place oil reserves have been estimated at more than 560 billion barrels with about 140 billion barrels of extractable oil……….”
According to the CIA
(2011) Iranian reserves were pushed back to the 4th largest in the world, behind Saudi Arabia, Venezuela, and Canada. Last year, Venezuelan reserves jumped with some OPEC estimates putting them ahead of both Iran and Saudi Arabia. Iranian and Iraqi ‘proven’ reserves have been hampered over the past 30 years by wars, sanctions, and Western economic blockades. It is possible, nay very likely, that one or both of these countries has more reserves than the current leaders. The Iranians note their “in-place” reserves are 560 billion barrels, but that is only ‘potentially’ recoverable oil. As more explorations and studies are done, as well as more investments in technology and machinery, some of this ‘in-place’ oil becomes extractable.
Both Iran and Iraq suffered from lack of serious exploration and investment in new oil fields over the past three decades, and their reserves can only shoot up noticeably in the next few years. On the other hands there are reports that Saudi production capacity is declining as the country has been producing large amounts as a ‘swing’ producer. But Saudi Arabia has a huge land mass: there may be more oil reserves hidden under the sands, and not necessarily in the Eastern Province.
Of course, the expanded reserves do not help the Iranian people in the short term as the Western powers, under Israeli and ‘princely’ pressure, tighten their squeeze on the economy.
“Saudi Arabia’s government spending, flat since the last oil boom in the 1970s, is now rising at 10 percent or more annually. And it will rise faster still: The House of Saud’s survival instinct in the wake of the initial Arab revolutions led King Abdullah to announce $130 billion of largesse in February and March. The resulting increases in government employment and salaries can be cut only at the cost of more discontent. And that’s only what the kingdom is spending on its “counterrevolution” at home. Saudi Arabia will pay the lion’s share of the pledged $25 billion of Gulf Cooperation Council aid to Bahrain, Egypt, Jordan, and Oman. With Iraq, Syria, and Yemen likely flashpoints yet to come, the bill will only increase. Already, nearly a third of the Saudi budget goes toward defense, a proportion that could rise in the face of a perceived Iranian threat. Meanwhile, fast-growing domestic demand poses a serious threat to oil-export revenues. The kingdom is one of the world’s least energy-efficient economies: With prices fixed at $3 per barrel for power generation and $0.60 per gallon of gasoline, Saudi Arabia needs 10 times more energy than the global average to generate a dollar of output. Subsidized natural gas, too, is in short supply, undermining an economic diversification drive focused on petrochemicals. As much as 1.2 million barrels per day (bpd) of oil are burned for electricity to meet summer air-conditioning demand, yet Jeddah, Saudi Arabia’s second-largest city, still suffers frequent power cuts………This combination of higher spending and lower exports shortens Saudi Arabia’s time horizon. Usually considered, on shaky evidence, to be a “price moderate” within OPEC, the kingdom now requires $85 per barrel to balance its budget. That figure will rise to $320 by 2030………”
The problem for the Saudis is that long before the year 2030, both Iran and Iraq would have resumed full control of their oil fields. Iraqi and Iranian outputs have been disrupted by thirty years of war and revolution and Western sanctions, but that era of instability will end soon. Both countries threaten to overtake Saudi Arabia as OPEC’s main producer and possibly as ‘swing’ producers. Both have huge untapped resources and unconfirmed reserves (thirty years of instability takes its toll). Then there is Venezuela, which OPEC recently declared now has the largest oil reserves, surpassing Saudi Arabia. It is almost certain that within a decade from now the heavy weights in OPEC will be three ‘ornery’ republics in addition to the Kingdom without Magic.