Iran’s President Hassan Rouhani has announced the discovery of a new oil field in the south-western province of Khuzestan. Exploration started at the site, called the Namavaran oilfield, in 2016, with 31 billion barrels previously discovered. The massive new oil field adds an additional 22 billion barrels to estimates.
Iran’s oil minister Bijan Zanganeh said that the new oilfield is the second largest in the country at about 2,400 sq. km (927 sq. miles). There is also the possibility that the field will be expanded in a southwest and southeast direction. Iran also shares a massive offshore field in the Persian Gulf with Qatar. According to the U.S. Energy Information Administration (EIA), Iran is the world’s fourth-largest holder of oil reserves and has the second largest deposits of natural gas.
According to the statement from the Iranian minister, the discovery will add roughly two billion barrels of crude oil to the country’s reserves in the near term. The area is comprised of dense material with a considerable amount of stone, which will prove problematic for the country’s current technology. The oil deposits are estimated to be about 80 meters (260 feet) deep.
Oil had become a major source of revenue for Iran under the 2015 nuclear deal, but the U.S. decision to withdraw from the deal has caused enormous problems for the Iranian oil industry. Any company or government that buys Iran’s oil faces harsh U.S. sanctions, costing the country billions in losses and sharply depreciated Iran’s currency, the rial. As of January 2018, Iran had an estimated 157 billion barrels of proved crude oil reserves, according to EIA data.