WRAP: Iran's oil reserves revised up to 150.31 billion barrels

Tehran (Platts)--11Oct2010/1109 am EDT/1509 GMT

Iranian oil minister Masoud Mirkazemi Monday announced a 9% increase in the OPEC's state's crude oil reserves to 150.31 billion barrels, putting Iran's reserves above recently revised Iraqi reserve estimates and setting the stage for what could potentially become a tussle over quotas.

Iran, already OPEC's second largest producer after Saudi Arabia and home to the second biggest natural gas reserves after Russia, also revised its gas reserve estimate to 33.1 trillion cubic meters.

"Today, our oil reserves have reached 150.31 billion barrels," Mirkazemi told a news conference in Tehran. "With the exploration that we have made...by the end of the year, it will become more," he added. Mirkazemi also announced a major natural gas discovery.

He said the field, Sefid, was located in the southern province of Hormuzgan along the strategic Strait of Hormuz and contained 70 billion cubic meters of natural gas reserves, of which 72% was exploitable.

BP's latest statistical review puts Iranian gas reserves at end 2009 at 29.61 Tcf.

The move comes just weeks after Iraq, Iran's erstwhile enemy, raised its proven crude oil reserve estimates by 25% to 143.1 billion barrels, pushing Iraq up to second place after Saudi Arabia as holder of the second largest conventional oil reserves globally.

SENSITIVE ISSUE

The reserve issue is a sensitive one since it determines OPEC quotas, which are allocated on a pro-rata basis. While Iraq is currently excluded from OPEC output restrictions as it rebuilds its shattered energy industry, it was previously allocated an equal quota to Iran's.

The issue is not likely to surface at this time since all indications are that OPEC will maintain its current production ceiling and Iraq is still producing below levels it attained in the months before the US-led invasion of March 2003. OPEC officials have said there is no intention to bring Iraq back into the quota system until its production rises to at least 4 million b/d.

Current Iraqi oil production is running at an average of around 2.4-2.5 million b/d, below the 3 million b/d it managed to attain before the 2003 war. However, the Iraqi oil ministry has awarded contracts to international consortia to develop its major oil fields with the aim of raising its production to 12.5 million b/d within six to seven years. The first increments are due to come online from the end of this year. Iraqi oil minister Hussein al-Shahristani said on October 4, when he announced the reserve hike, that the new information would be conveyed to the OPEC secretariat in Vienna and suggested Iraq would seek a higher production allocation on the basis of its higher reserves.

Mirkazemi said, however, that he did not expect OPEC to change its current output target, which has been set at 24.845 million b/d since January 2009 and is widely expected to be rubber-stamped yet again by the 12-member group though it will apply to just the 11 members bound by output restraint. "