Iran Makes Huge New Oil Discovery

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 on Monday.

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

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 two other leading undeveloped fields.

Hoping to boost its oil production capacity to five million barrels per day (bpd) by 2005 from four million bpd, Iran now has placed greater emphasis in recent years on exploration and attracting foreign investment through so-called buy-back schemes.