Focus on Iran's ageing onshore oilfields

Feb 18, 1997 01:00 AM

Feb. 5, 1997 The performance of Iran's massive but ageing onshore oilfields has been thrown into the spotlight after recent statements from a parliament official that crude output has fallen because of a lack of government investment and poor maintenance. Mohsen Yahjavi sounded oil industry alarm bells when he said Iran's production had fallen 80,000 bpd below its OPEC quota of 3.60 mmbpd and that a further fall of 110,000 bpd could be expected if funds were not made available. "Iran could produce more but they (NIOC) want to be on the conservative side until the gas injection projects are fully implemented," a senior upstream analyst said. Injection projects at the Marun and Bibi-Hakimeh fields were commissioned last year to maintain output and prolong field life but these take between two to three years to take effect. Other analysts and Tehran-based diplomats said it was difficult to get equipment and that morale was low after amid staff departures at NIOC's onshore headquarters in the south-western city of Ahvaz. Doubts have also been raised on the quality of reservoir management and the sophistication of Iran's models and simulation work.Despite Yahjavi's comments, which came during tough negotiations over the national budget, it is difficult to prove that onshore production is in decline or struggling to meet current or future OPEC quota levels. Iranian output regularly swings between 3.5 and 3.75 million bpd and exports have remained steady at 2.5 million bpd since 1994 because of higher offshore output, independent assessments show. Figures reported by MEES show that exports of onshore crude from the Kharg Island terminal have fallen to 2.12 million in bpd last year from 2.20 million bpd in 1995 and 2.37 million bpd in 1994. Offshore crude exports rose to 437,000 bpd in 1996 from 198,000 bpd two years previously to maintain total average exports of 2.5 million bpd. But export data cannot show the whole picture since onshore output could be steady, or even increased to feed local demand.

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