Page 5 - FSUOGM Week 19 2021

FSUOGM COMMENTARY FSUOGM

Source: US EIA.

bulk of these resources are found at geologically Turkmenistan
challenging sites. It needs international exper- Turkmenistan contains around 1.1bn barrels of
tise to help develop these resources, but years liquid hydrocarbons and 255 bcm of gas in proven
of sanctions have made it difficult for Tehran to and probable reserves, according to the EIA. It has
attract foreign partners. made more progress than Iran, although its offshore
Former US President Donald Trump ratch- oil and gas production pales in comparison to that of
eted up sanctions against Iran in 2018 after Azerbaijan and Kazakhstan.
pulling the US out of the Joint Comprehensive There are two oil and gas projects in pro-
Plan of Action, otherwise known as the Iran duction in Turkmen waters. The first is Block
nuclear deal. This led a number of interna- 1, operated by Malaysia’s Petronas. Petronas
tional oil companies (IOC) that had entered entered into a 25-year production-sharing
the Middle Eastern state to subsequently pull agreement (PSA) for the block in 1996 and it is
out. But Trump’s successor, Joe Biden, has understood to produce over 100,000 barrels of
vowed to rejoin the agreement and roll back oil equivalent per day (boepd), of which around
sanctions. This raises the chance that Iran will 65% is gas and 35% is liquids.
be able to secure its needed international assis- Turkmenistan’s other active project is Block 2,
tance in the Caspian. which is under the control of Dragon Oil, which
The most promising project in Iranian waters is majority-owned by the Emirates National Oil
is Block 6 containing the Sardar-E-Jangal field, Co. It is the country’s largest oil asset, with a gross
discovered in 2012. Iran’s petroleum ministry output of around 80,000 bpd.
estimates that the field holds around 2bn bar- Other prospects include the aforementioned
rels of oil and 1.4 trillion cubic metres of gas in Dostluk, a field contained within the offshore
in-place resources. Block 3 that was awarded in 2007 to Cyprus-reg-
Sardar-E-Jangal has a complicated geological istered Buried Hill. The block lies adjacent to
structure, and it is understood that its devel- Azerbaijan’s flagship Azeri-Chirag-Gunashli
opment would require advanced techniques, (ACG) oil project, and in a 2012 report Buried
including horizontal drilling. Iran signed a Hill estimates its 2C contingent resources at
memorandum of understanding (MoU) in 2017 1.36bn barrels of oil and 70 bcm of gas.
with Norway’s Offshore Resource Group (ORG) Russia’s Itera, owned by Turkmen-born busi-
on joint development of Block 6 and three other nessman Igor Makarov, also has a PSA to develop
blocks in the Iranian Caspian. But Trump’s Block 21. But only limited exploration work has
sanctions prevented a binding agreement being taken place at the site. Turkmen authorities have
reached. previously courted European partners for pro-
In addition to ORG, Iran has also discussed jects, including Denmark’s Maersk and German
joint development work with investors from firms Wintershall and DEA, but they later exited
China, the Netherlands, Russia and the UK. projects without making any discoveries. ™

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