Oil Minister Bijan Namdar Zanganeh said on 3 July that the 17,000 million barrels of new reserves come from the Kushk and Hosseinieh fields near the Iraqi border, which have now been merged under the name Yadavaran. Iran’s total proven reserves now stand at 132,000 million barrels. Recoverable oil at Yadavaran is 3,000 million barrels, with a possible production rate of up to 400,000 barrels a day (b/d). National Iranian Oil Company (NIOC) head Seyyid Mehdi Mirmoezzi said on 7 July that OPEC had recognised its revised reserves figure.

Saudi Arabia holds the world’s largest oil reserves at 262,800 million barrels and Iraq had claimed the second largest, with 115,000 million barrels. OPEC production quotas are decided partly on the basis of total reserves and Tehran has long feared that the revival of the Iraqi oil industry will push its own output ceiling down. ‘There is a general discussion going on in OPEC to work out a new quota system,’ said Zanganeh. ‘These discussions will take a long time. It needs a consensus among all the members.’

However, Iran is now believed to be producing at peak capacity of around 3.9 million b/d and needs to bring new output on stream quickly. Zanganeh said capacity would reach 4.3 million b/d by the end of the Iranian year in March 2005. The Soroush Nowrooz fields developed by the Royal Dutch/Shell Groupare currently being brought on stream.

However, some IOCs have warned that longer-term field development is still uncertain. The southern parts of the massive Azadegan field were awarded to a Japanese-led consortium in February. NIOC financial wing Naftiran Investment Companyhas shifted its 20 per cent stake in that venture to another NIOC subsidiary Petropars, which is carrying out the South Pars phases 1 and 6-8.

A tender is out for the north part of Azadegan and Mirmoezzi said that Norwegian, Spanish, French, Chinese and Australian companies were mulling participation. No bid deadline has yet been set for the project. The Ahwaz Bangestan project has meanwhile been delayed by a further six months after the UK’s BPand France’s Totalrequested bid extensions.

‘It’s all very well to bring production on stream, albeit belatedly,’ says an IOC executive. ‘But the existing form of contracts is prejudicial to long-term field management and without that you will see continued problems in pushing up production capacity.’