Iran striving to achieve self-sufficiency in oil production
The slogan, made famous by Iran's revolutionary leader, Ayatollah Ruhollah Khomeini, highlights the country's new drive to tap its oil riches on its own — without Western investment or technological know-how — as Iran faces a threat of tighter U.N. sanctions and American financial pressure over its nuclear ambitions.
The Azadegan field in southwestern Iran showcases the bid: the first major field to be developed solely by Iranian companies. Pumping began in February in the vast oil basin — off-limits to the public, but The Associated Press received permission to tour the site recently with a government escort.
The self-sufficiency drive has become a vital test of how well Iran can ride out more Western sanctions — and possibly rake in billions of dollars more in oil revenues as prices hit record highs. It also is shaping up as a political gamble for hardline President Mahmoud Ahmadinejad, the main proponent of using local firms.
Among the challenges that could frustrate Iranian oil engineers: dealing with high-pressure fields, elevated sulfur content in the crude and water levels inside the wells.
U.S. pressure — and worries about shifting rules in Iran's oil policies — have kept major oil companies on the sidelines in recent years, and Iran lacks the deep pockets to undertake major projects alone. In April, Oil Minister Gholam Hossein Nozari said Iran needs some $500 billion of oil industry investment over the next 15 years.
This has led Iran to turn to lower-tier oil developers, signing deals recently with Croatian, Malaysian and Chinese firms.
"Total, Shell and Repsol of Spain are hanging back from signing contracts, which the Iranians are desperate for them to sign," said Simon Henderson, an oil expert at the Washington Institute for Near East Policy.
"If you were going to say to me, 'Name me 20 countries in the world that have good reputations for oil exploration,' I don't think I would get to Croatia until about 120," he added.
Iran clearly has some homegrown expertise.
Its oil industry — and partnerships with some the world's biggest firms — has existed for nearly a century. Iran sits on the second-largest known reserves after Saudi Arabia, and its known natural gas reserves are second only to Russia.
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