Iran announces new shale oil find

Major shale oil reserves have been discovered in the western province of Lorestan, according to Bahman Soleimani, a senior official at Iran’s state-owned National Iranian Oil Company (NOIC).

The new reserves, which were discovered in the Ghali Koh field, are believed to amount to around two billion barrels of light crude. Soleimani also added that the province is also being explored for shale gas reserves.

The find follows similar discoveries of shale oil in the Kerman and Semnan provinces. These new reserves are unlikely to be exploited any time soon, however, because Iran is estimated to have over 150 billion barrels in conventional oil reserves. In Iran, conventional oil production costs only $10 a barrel, while it would likely cost $40–80 a barrel for shale oil there. This makes the investment economically unattractive, at least at current oil prices.

Shale oil is typically more expensive to produce because oil shale must be processed to extract oil. Sometimes the shale is mined and processed above ground, but it can also be processed on site by heating the shale and extracting the oil through wells. The resulting shale oil is suitable for use as fuel, but it can also be upgraded and used as feedstock for other industries, such as to make lubricants.

The principle of shale oil extraction dates back to the 10th Century, but recent technology has made it more economically feasible. For example, Royal Dutch Shell, which also produces lubricants like Shell Tellus S2 M 32, claims its Shell ICP technology is feasible at prices over $30 per barrel.