Iran’s giant oil discovery brings “little material benefit” under sanctions

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The discovery of a massive oil field in Iran will deliver little in the way of tangible spin-offs for the second largest country in the Middle East, according to international analysis of the discovery.

The discovery made world headlines recently, but according to data and analytics company, GlobalData, the country is facing challenges reaping the full-benefits of the yield.

Will Scargill, Managing Analyst, Oil and Gas at GlobalData, commented: “Limits on investment and exports due to sanctions mean that the exploration successes at the Namavaran field can’t translate into material benefit.

“Iran already has a large number of projects holding billions of barrels of resources that it cannot fully-realize, and this just adds to that list.

“The headline figure of 53 billion barrels also masks a more modest reality. The government has stated that 22 billion of this is newly discovered and due to the challenging nature of the reservoir only 10% of the total resources are thought to be recoverable.

“The government will reportedly look to develop the field alongside others that lie above the newly identified reservoir. However, this would likely come at the expense of production from other fields and only reach a small portion of the field’s capacity.”

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