Last Friday, the Iranian regime’s president Ebrahim Raisi claimed in a meeting that his regime could be a ‘stable’ and ‘viable’ partner for the members of the BRICS group to access the ‘energy bottlenecks’ and ‘major world markets’.
This is while, according to the Oil Price website, Iran is exporting just 961,000 barrels per day. This number shows that the regime is not a stable and viable partner for business as it claims. It should be further noted that the regime is forced to smuggle and sell this oil at a very low price due to the US sanctions.
Iran’s oil and gas industry is now in a critical situation because of the regime’s corruption and mismanagement, as well as the economic sanctions.
The regime is not in a position to benefit from the common gas and oil fields with neighboring countries, as most of the extracted resources from these oil fields are done by those countries. A clear example is the joint gas field of South Pars between Iran and Qatar.
Officials have previously stated that Iran’s dilapidated oil and gas industry needs tens of billions of dollars in investment each year to maintain its current level of field production. Oil and gas industry experts have also stated that obsolete equipment and outdated rigs can no longer pull anything from the ground, let alone compete with giants such as Saudi Arabia’s ARAMCO or the United Arab Emirates’ ADNOC.
According to the statistics, Iran ranks fourth in proven oil reserves, which is roughly 10 percent of the world’s total proven petroleum reserves and would last 145 years if no new oil was found. The estimated amount of the country’s oil as of 2021 is about 155 billion barrels. Iran currently has the second-largest gas reserves in the world after Russia.
All of Iran’s natural resources have been left unused due to the regime’s mismanagement, widespread corruption in the Ministry of Oil, and sanctions, as no international company has been able to invest to increase the extraction of these reserves.
The severe lack of investment has greatly reduced Iran’s oil extraction. While the official figure naturally varies for different fields according to different conditions, in general, the average extraction rate of Iranian oil barely reaches 20 percent.
In November last year, at a coordination meeting for the 2022 budget, Iran’s oil minister Javad Owji announced the need for $160 billion for Iran’s oil and gas projects, stating that the necessary investment had not been made in the oil and gas industry in recent years.
He warned that Iran would become an importer of these products in the future if no money was allocated to the development of the oil and gas industry.
Just last week, Qatar signed three new gas contracts with three major European and American companies, showing its serious determination to increase gas production and accelerate the development of the joint gas field with Iran. These contracts will prevent Iran from reaching Qatar in the field of gas extraction any time soon.
Qatar seeks to replace Russian gas in Europe following the Russia-Ukraine war, as they are aware that Europe warmly welcomes the reduction of dependence on Russia. Meanwhile, Iran could have taken away the competition from its neighbors by further developing and extracting South Pars, Arash, Farzad, Azadegan, and five other fields.
These days, Qatar, the United Arab Emirates, and Saudi Arabia are taking control of the energy markets, especially the world gas market, promoting energy diplomacy in the best possible way. On the other hand, the regime, which has traditionally been unaware of international economic opportunities and instead focused on other priorities, first and foremost among them regional meddling and the costly pursuit of missile and nuclear programs, is apparently set to miss this great and unrepeatable opportunity.