“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. Cheers
mhg
BFF “Algeria said Thursday it will not boost crude oil exports in the event Iran suddenly cuts supplies to Europe after the EU imposed new sanctions on Tehran over its nuclear drive. “We have a programme in place that won’t be modified,” Energy Minister Youcef Yousfi told Algerian news service APS. EU foreign ministers agreed Monday on an immediate ban on oil imports and a phase-out of existing contracts up to July 1, as the West ramped up the pressure over Tehran’s nuclear activities and urged it to return to talks. However, Iran’s parliament is expected to consider next week a bill to ban oil exports to Europe much sooner, a move that could potentially raise prices………”
An article in the Saudi daily al-Hayat (owned by prince Khaled Bin Sultan) called Algeria a shumooliyya “totalitarian” state yesterday. That was the first time they call any Arab regime other than Libya and Syria by that epithet. They don’t do that unless they have a royal or princely green light, as part of state policy. I am not sure if this is related to the refusal of Algeria to join the Western blockade against Iran (unlike the Saudis). Yet it probably is: for a Saudi newspaper owned by a prince (they are all owned by princes or their retainers) to call anyone (bar none, well, maybe except North Korea) a “totalitarian” and undemocratic regime is a stretch. After all, this is the Absolute Tribal Polygamous Democratic People’s Kingdom of (Saudi) Arabia. Cheers
mhg
BFF “Ahmadinejad said during a speech at a gathering of the personnel of Sarcheshmeh Copper Complex in the city of Sarcheshmeh, the southeastern province of Kerman, on Thursday. The European Union formally imposed an oil embargo on Iran and agreed to a freeze on the assets of the Central Bank of Iran on Monday, but existing contracts will be honored until July 1. “The West must be aware that the Iranian nation… does not need them. You impose embargo on Iran’s oil but do not see that the United States has not bought oil from us for 30 years, but nothing happened, and Iran followed its path with dignity,” Ahmadinejad said, addressing European countries. He stated that the sanctions are futile……….” Mehr News
Yet this next news item seems to contradict Ahmadinejad’s assertion that the sanctions will not hurt. He is right in one respect: the sanctions are unlikely to hurt the regime. They always hurt the people: “A top Iranian diplomat has expressed Tehran’s displeasure over an announcement by certain Persian Gulf Arab states to replace Iran’s oil exports, saying Iran will consider such a move as “unfriendly”. Hossein Amir-Abdollahian, Iranian deputy foreign minister for Arab and African affairs, made the remarks during a meeting with the undersecretary of the Kuwaiti Ministry of Foreign Affairs, Khalid Al-Jarallah, in Kuwait City on Thursday. Saudi Arabian Oil Minister Ali al-Naimi last week said that his country will make up for any shortfall in world oil supply caused by sanctions against Iran. ………” Mehr News
The Iranians must have a sense of having been here before, a sense of déjà vu (all over again). During the utterly senseless and futile 1980-99 war, their petroleum facilities were bombed and they were under an American economic siege. Not only did the Saudis pick up the slack and expanded their market share, other Gulf states also sold their own oil for Ba’athist Iraq’s account (Saddam’s exports were severely curtailed). The Iranians resorted to the “tankers war’ to punish other Gulf exporters, which led to some naval skirmishes with the U.S. navy. The Iranians did not do well in those skirmishes, had some of their speedboats and offshore oil platforms destroyed. The lowest point came on July 3rd 1988, when the USS Vincennes shot down a civilian Iranian airliner (Iran Air 655) over the Gulf, killing nearly 300 civilians. The ceasefire was declared in August.
Had those passengers been Westerners (like the Pan Am 103), and had the guilty party been Libya (like the Pan Am 103), the Iranian victims would have received more than a billion dollars from Qaddafi (just like the Pan Am 103 victims). All posthumously of course (just like the Pan Am 103 victims). Cheers
mhg
BFF “Iranian Foreign Minister Ali Akbar Salehi has advised Saudi officials against making injudicious remarks about boosting oil production amid European countries’ efforts to impose oil sanctions on the Islamic republic. “We expect the countries in the Persian Gulf region, particularly Saudi Arabia, with which we have always called for the best relations, to avoid injudicious discourses,” Salehi said on Tuesday in response to Saudi Arabian Oil Minister Ali al-Naimi, who has said that his country will make up for any shortfall in world oil supply caused by sanctions against Iran. “If Saudi officials’ recent remarks are to be regarded as their official view, we advise them to respond more thoughtfully and sensibly to regional issues,” Salehi added. Al-Naimi told CNN on Monday that his country could increase production by two million barrels “almost immediately” if sanctions are imposed on Iran’s oil industry. Iran exports roughly 2.5 million barrels per day. The Saudi minister also expressed his doubts that Iran could successfully close the Strait of Hormuz..……..” Mehr News Agency (Iran)
It looks like the Saudis have succeeded in pushing any hesitant Gulf state toward the American-Israeli position on Iran. With the likely exception of Oman which usually marches to its own music. The Saudis are taking an openly harder line now: the minister said his country is willing to produce about the same amount of crude that Iran would lose in exports. Even more telling, he opined that Iran can’t close the Strait of Hormuz. It sounds like he was inviting the West to go ahead and march toward the destructive regional war that some Gulf oligarchs want the Americans to wage again. The Saudi king and the UAE rulers may get the wish they have expressed in the past (Wikileaks). And there is no doubt that it would be a regional war this time around. All this is reminiscent of the 1980s, when most GCC Gulf states sided with Saddam Hussein after he invaded Iran. Not only did they supply Saddam with financing and weapons, some of them also sold their own crude oil on behalf of Iraq. Once Iranian’s ability to sell oil was cut, they started the tankers war in the Gulf. That led to confrontations with the U.S navy in the Gulf (of course the Iranians didn’t do well in those confrontations). After that war ended Saddam turned his brotherly neighborly guns south toward the GCC. History may be about to be repeated, but on a larger more destructive scale. Of course the GCC states have the right to sell as much oil as they want and to whomever they want to. Even to poached former customers of Iran. Still all perfectly legal, more legal than the expected new war that the West may wage in the Gulf. But in time of war and desperation this type of logic is meaningless in reality, and is thrown out the window. The Iranians will correctly see it as an attempt to help the Anglo-American-Israeli war effort against them. The oil embargo is not sanctioned by the United Nations, but is purely American, with Israeli instigation. From the Iranians’ point of view, they will see the same neighbors again siding with an ‘aggressor’, this time without the convenience of the aggressor being an “Arab” side. Cheers
mhg
“Oil policy was often divorced from the wider politics of the region, analysts said, with one observing that “the Iranians have been trying very hard to please the Saudis right now”. Iran appears eager not to further antagonise Saudi Arabia at a time when Tehran is coming under increasing international pressure over its nuclear programme. Tehran’s main concern appears to be to discourage Riyadh from facilitating an expected European oil embargo by promising to make up for lost production. The Islamic republic’s supreme leader, Ayatollah Ali Khamenei, earlier this week sent Heydar Moslehi, the intelligence chief, to Saudi Arabia for a rare meeting with its interior minister, Prince Nayef……..”
They can kiss all they want, the Iranians and the Saudis, but it will never develop into a deep tongue-twisting body-tingling French kiss. Not of the kind they have with their respective allies.Not of the kind George W. Bush used to have with King Abdullah. Cheers
mhg
“When U.S. Secretary of State Hillary Clinton made a statement about the need to speed up political reform in the Arab countries, especially Saudi Arabia and Bahrain, did she really think that is possible under these two regimes? There is no way the answer to that can be in the affirmative, unless “reform” means some cosmetic marginal plans and some practices like symbolic elections and “consultative councils” that the state media use……… These day of domination of oil money, such terms are meaningless, especially when large Western public relations firms are available to polish the images of despotic regimes that have unlimited financial liquidity. When the price of crude petroleum exceeds $110 per barrel, the weapon of money in the hands of these repressive regimes becomes an even more effective weapon than torture and other means of repression. I recall meetings between op Western officials, among them Tony Blair, and the now-murdered Colonel Qaddafi when he was an absolute dictator. Yet the same media quickly changed the image of that “repentant leader” back to the “dictator that must be overthrown”………..”
This is my translation of a brief excerpt of a column by exiled Bahraini academic and activist, Dr. Saied al-Shihabi who lives in London. Arab columns are often long, some are way too long, most should not even be written. This was a good one, I enjoyed reading it. Cheers
mhg
“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. Cheers
mhg
BFF 
