March 01 2004
According to a Management and Planning Organization report on the plan's implementation, these objectives have not been achieved due to the irregular growth of domestic consumption, which curtailed exports, and the pursuit of OPEC (Organization of Petroleum Exporting Countries) policies on limited supply of crude oil.
Actual exports are11% behind the target objectives, as the average growth index has increased by only 0.5% since 1999, on the basis of 2.1 million barrels per day (b/d) of crude exports.
The oil produced under buy-back projects stood at 88,300 b/d during this three-year period, just 55% of the target established in the Third Development Plan, due to reluctance on the part of foreign investors to make fresh investments and delays in bringing projects to production.
According to the report, Iran's total income from crude exports during the first three years of the Third Development Plan stood at $56.3 billion, 61% more than the income projected in the plan, denoting an annual growth of 9.6% during each year of this period.
Output increased during this period through the implementation of buy-back projects and facilities under Article 85 of the Third Development Plan Act, as well as Article 29 of the Budget Bill, especially in jointly owned oilfields such as the South Pars Gas Field, Salman, Nosrat and Forouzan.
Decreases in oil production were also checked to some extent by:
Crude production increased by 2% during the first three years of the Third Development Plan with an average output of 4 million b/d, reaching 99% of the oil production targets established in the plan.
According to the report, a failure to develop existing oilfields and to bring new fields onstream, coupled with delays in the implementation of gas-injection projects to slow down an ongoing decrease in production to the tune of 10% per year, were the main reasons for a mere 0.7% increase in onshore production capacity. This increase is just 0.3% above the figure envisaged in the Third Development Plan.
A 9.5% increase in offshore production was principally due to:
As a result, 91.6% of the targets envisaged in the plan were reached.
Despite a continued reduction in output by 10% each year since 1999, the output in oilfields jointly owned with neighbouring countries increased by 6% more than the projected targets, due to increased investment in development through contracts concluded in respect of the Salman, Nosrat and Forouzan oilfields, as well as those in Ilam province.
As regards the impact of buy-back production schemes, the report indicated an increase of 25.2% in the exploitation of the relevant oilfields during the first three years of implementation of the Third Development Plan as compared with production levels in 1999. However, due to delays in finalizing these contracts, only 55% of the targets projected in the plan were reached.
Iran's total exploitable oil and gas reserves are estimated at 99.08 billion barrels as of March 20 2002; crude oil reserves are estimated at 77.66 billion barrels, which will be depleted in 74.6 years at the level of exploitation in March 2003. This puts Iran in third place behind Saudi Arabia and Iraq as regards volume of reserves.
For further information on this topic please contact Behrooz Akhlaghi at International Law Office Dr Behrooz Akhlaghi and Associates by telephone (+98 21 873 21 38) or by fax (+98 21 873 41 29) or by email (email@example.com).
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