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the future
Modern oil exploration in Iran started in
1901, with the first commercial oil discovery
coming at Masjid-I-Sulaiman seven years
later. Today, Iran is one of the world's
leading hydrocarbon nations, producing
more than 3,600,000 B/D in 1997 and
exporting just over 70% of that total.
History
step in a process that would transform the Middle East
The investment required to make one These early exploration drilling electrical imagery in the 1980s. However,
Oil nationalization
of the world’s biggest oil fields a programs had mixed success but when the early engineering studies of fracturing The National Iranian Oil Company
commercial operation, was huge and oil was found the results could be were conducted using state-of-the-art (NIOC) was established in 1951, and by
resulted in the incorporation of the spectacular (Figure 5.4). methods and their results influenced the 1954 an exclusive oil exploration
Anglo-Persian Oil Company in 1909. worldwide petroleum industry. concession had been granted to a
Four years later a pipeline from Masjid- consortium of American and European
i-Sulaiman field to the coast at Abadan
Carbonates come of age oil companies.
was completed. This allowed the first oil In the early days at Masjid-i-Sulaiman,
Geophysical pioneers In 1955, the Exploration Division was
to be exported. Almost one year later a most people believed that the oil was Some of the earliest geophysical surveys formed by NIOC. This department had
refinery was completed at Abadan. being produced from the Gachsaran for petroleum exploration were responsibility for exploration and
D’Arcy (and the Anglo-Persian Oil formation rather than the underlying performed in Iran (Figure 5.5). Torsion- exploitation of oil and gas throughout
Company) had to wait until 1914 for Asmari formation because most of the balance gravity measurements, the country, with the exception of
their first profits – 14 years after producing wells were shallow. However, experimental magnetic surveys and southwest Iran which lay in the
exploration began in Iran. He did geological studies of cable tool cuttings electromagnetic surveys were all consortium’s concession area.
receive considerable support from the and correlation with Asmari outcrops, conducted in the 1920s. The consortium was abolished in 1973,
British Empire, including a detachment about 60 km from the field, proved that The new technique of seismic and replaced by the Oil Service
of Bengal Lancers that went to Masjid-i- the Asmari carbonate was the prolific refraction was imported, but the Company of Iran (OSCI) that, under
Sulaiman to protect the growing oil producing formation. greatest successes were achieved NIOC guidance and supervision,
operations considered critical to the The realization that oil was being through local modifications and conducted exploration and production
naval oil conversion championed by produced from a carbonate formation had improvements that finally allowed the activities in southwest Iran.
Winston Churchill, the First Lord of the a major impact on exploration around the true, subsurface, anticlinal structures to Following the Islamic Revolution of
British Admiralty. world. Until this discovery, the world’s be accurately mapped even when the 1978, exploration and production
A new deal or arrangement was made geologists had focused their search for surface structure was misleading. activities were regrouped under two
with a 25-year supply contract and the hydrocarbons in sandstone units. In the early 1930s, a joint directorates (NIOC North and NIOC South
British Government holding a controlling Excellent outcrop studies of fractures geological–engineering study Fields) and a single affiliate company (the
interest of 51%. The subsidiary D’Arcy were undertaken, but the realization that demonstrated that the Asmari in the Iran Offshore Oil Company).
Explo Company became British the surface fracture systems were Masjid-i-Sulaiman field was a single In the mid-1970s, Iran’s oil exports
Petroleum. Early success in Iran sometimes misleading would not clear hydraulic unit with good communication (around 5 MMB/D) accounted for around Figure 5.4: Early drilling operations in Iran were often dramatic. At Alborez
prompted further exploration work. until the introduction of borehole through fractures. This field proved to 15% of the world total. By 1981, the flare from this well caused huge mud and ‘lava’ flows
History
History
38 Middle East Reservoir Review Middle East Reservoir Review 39
production had dropped back to affairs. According to press reports, the processing and interpretation centers for as Ahwaz, Dorood, Marun and Soroush.
0.7 MMB/D – just 2.8% of the world total. plan called for “fundamental changes in petrophysical, geological, geophysical Geologists, petrophysicists,
Since 1981, however, there has been a management”. Since January 1999, the and reservoir applications. Cooperation geophysicists, reservoir engineers and
gradual but sustained improvement in oil ministry has been filing monthly has helped to ensure the success of technical support personnel work
production figures, which now stand at reports on the amounts of crude oil, extensive field studies on giant reservoirs together in integrated asset teams to
more than 3.5 MMB/D. refined products and gas exports. These such as the Ahwaz and Marun fields. deal with a range of major challenges.
Oil is a vital element in the modern will help to track Iran’s actual revenues A detailed reservoir characterization
Iranian economy, accounting for around from these sales. of Marun field evaluated fluid contacts,
95% of foreign currency earnings. The NIOC has recently focused on Characterizing Iran’s reservoir fluids, reservoir geology and
The 1990s saw a move towards frontier exploration efforts in the hopes petrophysical logs. The project also
reservoirs
international cooperation between the of adding 1–2 billion barrels to proven examined faulting, fracturing and other
national oil companies, and international reserves by the end of 1999. The NIOC earth scientists, working in structural features. Detailed geological
oil and service companies. Of all the oil- company’s current plans calls for drilling partnership with GeoQuest have built and reservoir models for Ahwaz field
producing countries in the Middle East, a large number of on- and offshore up extensive experience in analyzing helped to improve the accuracy of
the Iranian oil and gas development exploration wells. the reservoir properties and predictions about this field.
policy has been one of the most radical Since 1995, NIOC has made several characteristics of Iranian oil fields such A full-field simulation of Dorood field,
and forward looking. significant discoveries, including the
Darkhoven field, which is located
offshore Abadan and contains 2.5 billion Trillion cubic meters
The buy-back system barrels of low-sulfur, 39° API crude oil.
The buy-back process began in 1995, NIOC planned to start production from 13.9
(10.0%)
with calls for international investment in Darkhoven in 1999, with an initial
offshore fields. That initiative attracted production of 30,000 B/D and a second 24.6
(17.6%)
just two offers and only one – the South phase peak of 60,000 B/D. This is a
45.2
Pars gas field development with Total – challenging field with target reservoir (32.4%)
was implemented. depths greater than 15,000 ft. Near
In March 1998, the NIOC revealed Ganaveh, NIOC also found two onshore
plans to extend the scope of projects oil fields holding combined reserves of
available to international companies 100 million barrels.
through buy-back schemes to incorporate Figure 5.5: Geophysical operations in Iran began early with seismic 56.0
(40.0%)
some of its onshore oil reserves. In July refraction techniques being ‘imported’ in 1920. Working conditions
1998, Iran invited investment bids for for the early field crews were extremely tough
Oilfield service in Iran
about 40 upstream projects and a single The first Schlumberger operation in the
OECD Middle East
downstream operation (upgrading the Islamic Republic of Iran took place in
Former Soviet Iran (21%)
refinery at Abadan). Around 100 offers 1936 with the drilling of well Laleh-1 in Union Iraq (3.1%)
were received. the Masjid-i-Sulaiman area. The Other Kuwait (1.5%)
With the world’s fourth largest oil resistivity log shown in Figure 5.7 is the Saudi Arabia (5.3%)
UAE (5.8%)
reserves (at least 93 billion barrels) and oldest surviving log from Iran and was
second largest gas reserves (more than recorded by Marcel and Conrad
21 trillion cubic meters) Iran is in a very Schlumberger in 1938. Figure 5.8: With the world’s second largest
strong position. The investment and new World War II halted all logging natural gas reserves, Iran is well positioned
technology that will help NIOC to develop operations in Iran. Schlumberger logging to supply the world’s changing energy needs
these vast reserves more efficiently are operations resumed in the 1940s and
in the next millennium
now becoming available under the buy- have continued, without interruption, to
back scheme. Gas projects will take the present day.
priority, with gas production projected to In Iran, technology transfer has taken
reach 300 Bcf/yr over the next five years. place through best-practice training and
This increased production will be used to the deployment of technologically
enhance oil recovery in declining onshore advanced equipment and techniques.
fields, for local industrial consumption, Many of the innovative and industry-
and for export. leading products and services familiar
In December 1998, President Khatami to engineers operating in the Gulf of
called for the modernization of Iran’s oil Mexico or the North Sea, are being
industry and the discovery of new fields. used to locate and bring Iranian oil
In January 1999, Khatami approved a fields into production quickly, safely
plan to restructure the industry, Figure 5.6: Masjid-i-Sulaiman, the birthplace of modern, and cost-effectively.
including decentralization and the oilfield-development methods. This field was described in 1928 Oilfield service companies are being
separation of policy from executive as “the most efficiently developed oil pool in the world” encouraged to forge close partnerships
with the NIOC. These partnerships cover Figure 5.7: This resistivity log from exploration
the installation and operation of data well Laleh-1 was recorded in the 1930s by
History
History
Marcel and Conrad Schlumberger and is the
country’s oldest surviving well log
40 Middle East Reservoir Review Middle East Reservoir Review 41
100
based on extensive history matching field. South Pars was first identified in Figure 5.9: Iran’s
and detailed geological zonation studies, 1988 and originally appraised at daily oil production 90
History
42 Middle East Reservoir Review Middle East Reservoir Review 43