Iran says it has discovered major reserves of shale oil in the western parts of the country with a top official saying that the reserves are the first that have a feasible potential for production.
Bahman Soleymani, the deputy director of the Exploration Department of the National Iranian Oil Company (NIOC), was quoted by the domestic media as saying that the reserves – that had been discovered in Lorestan province - could hold as much as 2 billion barrels of light in-place shale oil.
Soleymani added that NIOC studies showed that the shale oil that existed in Lorestan could be brought into industrial production.
He said that certain seismic studies were also underway for shale gas reserves in the same area, and the studies were expected to be completed by October.
Iran had already reported the discovery of another shale oil reserve in Lorestan. In 2015, reports said the Garoo formation in the province contained huge reserves of shale oil but no exact figure was provided to determine its exact capacity.
Other similar discoveries were also announced to have been made in other provinces such as Khouzestan, Kerman and Semnan. However, there were no further significant developments to determine how much shale oil they were holding or whether producing oil from those reserves would be economically feasible.
It is still not clear how the NIOC can produce oil from Lorestan shale reserves given that the exclusive technology to do so is in the hands of US companies that are banned from Iran’s oil projects.
Besides, there are already speculations on whether producing oil from shale reserves would be economical for Iran given the high costs involved.
Previous reports showed that Iran had the world’s fifth lowest costs for producing each barrel of crude oil.
An estimate by global energy consulting enterprise – Rystad Energy – showed that the costs for producing each barrel of oil in Iran stood at $12.6. The highest and the lowest costs belonged to Britain and Kuwait at $52.5 and $8.5, respectively.
Based on figures provided by the International Energy Agency (IEA), the costs for producing each barrel of shale oil ranges from as high as $95 to as low as $25.
Iran holds the world’s fourth largest proven oil reserves of about 160 billion barrels which amount to almost 10 percent of the world's total.