Iran Misses Out on Caspian Oil and Gas Boom
While the Caspian Sea has emerged as a major hub for hydrocarbon development over the past three decades, Iran—despite being a coastal nation—is largely absent from the regional energy scene.
Iran is the only Caspian-bordering country without active oil or gas production in the basin. Its exploration efforts have been minimal in the last two decades, leaving it far behind neighbors like Azerbaijan, Russia, Kazakhstan and Turkmenistan.
By the numbers:
- The Caspian Sea accounts for about 1% of global oil and 3% of global gas consumption.
- Azerbaijan alone extracted 20 times more commercial gas and as much oil as the other four littoral states combined in the past year.
- Since the mid-1990s, nearly $145 billion has been invested in Caspian hydrocarbon development, mostly outside Iran.
Iran’s Caspian Woes:
- Iran’s Caspian Oil Company, under the oil ministry, remains mostly inactive, focusing on asset maintenance.
- Its only drilling rig, Amir Kabir, was removed for repairs nearly a decade ago and hasn’t returned to operation.
- Its only seismic survey vessel, Pajvak, was lost in a fire in 2005.
- Iran’s Caspian waters are the deepest in the basin, reaching depths of up to 1,000 meters, making exploration technically and financially challenging.
Dubious Discoveries:
- Iran claimed a discovery at the Sardar Jangal field nearly 20 years ago, but no independent body has confirmed viable reserves.
- Claims about a major Chalous gas field were officially denied by the Iranian Oil Ministry.
The one exception:
Iran indirectly participates in Caspian gas production through Naftiran Intertrade Company (NICO), a subsidiary of the National Iranian Oil Company, which owns a 10% stake in Azerbaijan’s Shah Deniz gas field.
- In 2024, Shah Deniz produced 28 bcm of gas and 4.2 million tons of condensate.
- Roughly 70% of production is retained by Azerbaijan, with the rest split among foreign shareholders, including Iran.
- Azerbaijan exports most of this gas to 13 countries, including Turkey, Georgia, and several EU nations.
