135 Billion Dollar Loss from Gas Injection Deficit in Iran's Oil Fields

The Research Center of the Parliament has issued a report on its official website warning about the deficit in gas injection into Iran's oil fields, stating that the loss could amount to 135 billion dollars. Iran's oil reserves are slightly over 700 billion barrels, and even with the injection of water and gas, the recovery factor for Iran's oil barely reaches about 25 percent. In other words, only 25 percent of Iran's oil reserves can be extracted using traditional methods. To increase the amount of recoverable oil (oil recovery factor), Iran needs to inject gas into its oil fields. According to official statistics from the Ministry of Oil, Iran should have injected at least 829 billion cubic meters of gas into these fields from 1990 to 2015, but in practice, only 290 billion cubic meters of gas have been injected. Statistics from the Research Center of the Parliament also confirm a significant deficit in gas injection into Iran's oil fields. The report adds that studies conducted at the National Iranian South Oil Company (which produces 75 percent of Iran's oil) prove that timely and planned gas injection will increase the oil recovery factor in these reservoirs by more than 9 percent, equivalent to an increase of over 16 billion barrels of recoverable oil. 'If the required gas for injection is not provided and the current trend continues, it is estimated that 2.3 to 2.7 billion barrels of crude oil will be trapped in the reservoir, and this amount of oil will no longer be recoverable, which, at a value of 50 dollars per barrel, means 115 to 135 billion dollars of wealth will be lost.' One of the important indicators for evaluating the performance of gas injection projects is the injection-to-production ratio. This ratio is obtained by dividing the cumulative volume of gas needed by the volume of produced oil reserves. The report adds that according to the initial planning, the average volume of gas required to produce one barrel of oil in the gas injection projects in the southern oil fields is about 76 cubic meters. 'Despite this, calculations show that so far, on average, only about 46 standard cubic meters of gas have been injected for the production of each barrel of oil. This means a deficit of 218 billion standard cubic meters of gas injection and consequently a backlog of production amounting to 1.3 billion barrels of oil during the implementation period of the gas injection projects.' Apart from cumulative production (the total oil production from the field), it is also important to note that currently, 80 percent of Iran's oil fields are in the second half of their lifespan, and according to the U.S. Energy Information Administration, these fields face an annual production decline of 8 to 12 percent due to reservoir pressure drop. Increased gas injection also boosts daily oil production and reduces production costs. The Research Center's report states that due to less gas injection in previous years and to compensate for this backlog, it is necessary to inject an average of 102 standard cubic meters of gas for the production of each barrel of oil in the coming years, whereas previously only 76 cubic meters needed to be injected. The report also refers to the government's future plans for the year 1404, stating that based on studies conducted at the National Iranian South Oil Company, the amount of natural gas required in the year 1395 is 172 million cubic meters per day, which will peak at 199 million cubic meters per day in 1399 and then decline, reaching 140 million cubic meters in the year 1414, but the government's planning for the next 10 years indicates that even less gas is expected to be injected into the fields.