Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Iran Finds 38 Billion Barrels of Crude

TEHRAN, Iran -- Iran has made a major new oil find containing estimated reserves of more than 38 billion barrels, making it one of the world's biggest undeveloped fields, a senior oil official was quoted as saying.

Abolhasan Khamoushi, general director of Iran's Oil Development and Engineering Co., told the Kayhan evening newspaper that the find, combining three neighboring oil fields, had been discovered close to the southern port city of Bushehr.

An Oil Ministry spokeswoman confirmed the accuracy of the report but could give no further details.

Khamoushi said preliminary studies indicated that the Ferdows field contained 30.6 billion barrels, the Mound field 6.63 billion and the Zagheh field 1.3 billion.

"The exact capacity will be announced shortly," Kayhan quoted Khamoushi as saying.

"Producing oil from these heavy crude fields needs special technology and heavy investment," he added.

The crude is of high density, making it less valuable on world markets than most of Iran's 90 billion barrels of proven reserves.

Commercially recoverable reserves are certain to prove much less than the 38 billion barrels in place, but the find could still rival the world's other two leading undeveloped fields.

Manouchehr Takin, an Iranian oil expert at the Center for Global Energy Studies, said he thought the crude would be a likely candidate for foreign investment given the high cost of production, and added the discovery would be significant in the long term for Iran's oil wealth.

"It is a huge quantity. With heavy oil you could get up 10 percent to 20 percent of this which could be up to five to even 10 billion barrels," he said. "With the improvement in heavy oil technology over the last 30 years, this is significant indeed."

Kazakhstan's Kashagan, under development by a consortium led by Italy's ENI, also is estimated to hold 38 billion barrels, of which 7 billion to 9 billion are thought to be commercially recoverable.

Iran's Azadegan, discovered four years ago, holds about 26 billion barrels with recoverable reserves of 9 billion.

Saudi Arabia's Ghawar, brought onstream in 1951, is the world's biggest oil field, still containing 70 billion barrels of recoverable reserves.

Hoping to boost its oil production capacity to 5 million barrels per day by 2005 from 4 million bpd, Iran has placed greater emphasis in recent years on exploration and attracting foreign investment through so-called buyback schemes.

That effort was dealt a major blow last month when Japan announced it would delay signing a $2 billion deal for a Japanese consortium to develop Azadegan until doubts about Iran's nuclear ambitions are cleared up. Iran insists its nuclear program is geared solely to producing electricity.