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Caspian Sea Iran

Four Obstacles to Iranian Oil and Gas Production in the Caspian Sea (Vali Kaleji, The Jamestown Foundation)

In recent months, a series of analytical publications sparked fresh debate in Iran about the status of Iran’s oil and natural gas reserves in the Caspian Sea as well as why it has still not taken greater efforts to exploit those resources. Namely, a piece in August predicted that a newly discovered offshore gas field—the so-called “Chalous Superstructure”—might be large enough to permit northern Iran to become a regional hub and start providing 20 percent of Europe’s gas needs (Kepco.ir, August 8). But separate analysis published the same month claimed that, based on a 20-year deal between Iran and the Russian Federation, Tehran was not in a position to engage in hard negotiations with the Kremlin regarding Iran’s share of Caspian offshore energy resources (Oil Price, August 19). A recent interview with Ardeshir Dadras, the president of Iran’s Syndicate of Compressed Natural Gas, seemed to echo that argument: “Iran and Russia had agreed that tapping the Iranian gas fields in the Caspian Sea would only be possible if Iran’s demand for gas exceeds its output. According to the agreement, Iran does not have the right to extract from eight large Caspian Sea gas fields located in Iranian waters” (ILNA, November 1).

Four Obstacles to Iranian Oil and Gas Production in the Caspian Sea – Jamestown