Iran Economy NewsIran aims to complete first exploration well for Caspian...

Iran aims to complete first exploration well for Caspian crude by March

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Bloomberg: Iran expects by next March to finish drilling its first exploration well for oil in the Caspian Sea, where it hopes to catch up with neighboring countries that are already developing major crude deposits.

Bloomberg

By Ladane Nasseri

Iran expects by next March to finish drilling its first exploration well for oil in the Caspian Sea, where it hopes to catch up with neighboring countries that are already developing major crude deposits.

Iran spent more than $500 million to build and install a semi-floating drilling platform and put supply boats into place, Mahmoud Mohaddes, National Iranian Oil Co.’s director for exploration, said in an interview in Tehran. The well is partially drilled, and the company aims to complete it by the end of the first quarter of 2012, he said.

“The Caspian Sea is a site that’s of high importance to us,” Mohaddes said yesterday. “Due to geopolitical reasons and given’s the site’s potential, oil and gas exploration there is among NIOC’s priorities.”

Iran is the second-largest crude producer in OPEC, after Saudi Arabia, and its reserves rank fourth in the world. Hampered by international sanctions over its nuclear power program, Iran has been slower to explore for energy in the Caspian and doesn’t produce any oil there.

Kazakhstan plans to begin producing as early as next year in the northern Caspian at Kashagan, the world’s fifth-largest oil field, where the partners include Eni SpA (ENI), Exxon Mobil Corp., Royal Dutch Shell Plc and Total SA. In neighboring Azerbaijan, BP Plc leads a group pumping oil at the Azeri- Chirag-Guneshli project, the largest field under development in Azerbaijan’s sector of the Caspian basin, according to BP’s website.

Dividing the Caspian

The five littoral nations — Iran, Azerbaijan, Russia, Kazakhstan and Turkmenistan — have disagreed over how to share the sea and its resources ever since the collapse of the Soviet Union in 1991, when Iran found itself with four Caspian neighbors instead of one. Iran wants the landlocked sea split into five equal parts, while the other four countries seek sectors matching the length of their respective shorelines, an arrangement that would limit Iran’s share to less than 15 percent.

Iran was unable to ship a semi-floating platform to the Caspian from outside the region because the sea is landlocked. Since Iran lacks experience building this type of drilling rig itself, it turned to a “foreign” contractor, Mohaddes said. He declined to name the company or its country of origin due to the sensitivity of the matter.

The Caspian Sea could hold 17 billion to 33 billion barrels of oil, compared with North Sea reserves of 17 billion barrels, the Iranian oil ministry news website, Shana, said in 2009. The sea may also hold as much as 8,000 billion cubic meters of gas, Shana said.

Mohaddes did not give a more recent estimate for the Caspian’s oil and gas deposits.

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