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Iran’s Huge Caspian Gas Find Is A Geopolitical Gamechanger

Geology

Iran last week revealed a huge new gas deposit located in the Iranian sector of the Caspian Sea. The ‘Chalous’ structure is to be developed with the intention of forming a new gas hub in northern Iran to complement the southern gas hub centred on the massive South Pars field.

The principal named developer of the Chalous site is Iran’s Khazar Exploration and Production Company (KEPCO) but technical and financial assistance will also come from Russia and China. If the initial estimates of the gas reserves held in the Chalous deposit are correct then Iranian gas will be able to supply at least 20 percent of Europe’s gas needs. However, the size, price, and destination of this gas will be co-ordinated with Russia, adding to the energy power that Moscow has over Europe, already a key matter of contention between Europe and its NATO partner, the U.S.  According to KEPCO’s chief executive officer, Ali Osouli, the Chalous structure is estimated to hold gas reserves equivalent to a quarter of the supergiant South Pars gas field, or around 11 of its phases. South Pars has an estimated 14.2 trillion cubic metres (Tcm) of gas reserves in place plus 18 billion barrels of gas condensate and already accounts for around 40 percent of Iran’s total estimated 33.8 tcm of gas reserves and about 80 percent of its gas production. The 3,700-square kilometre (sq.km) South Pars site is part of the 9,700-square km basin shared with Qatar (in the form of the 6,000-square km North Dome) but the Chalous structure lies squarely within Iran’s sector of the Caspian Sea. This has not so far been affected by the recent disputes between the five littoral states that share oil, gas, and other rights in it: Russia, Iran, Kazakhstan, Turkmenistan and Azerbaijan.

These disputes – exclusively covered and analysed by OilPrice.com – centered around the official designation of the Caspian as either a ‘sea’ or a ‘lake’ in early 2019, which was crucial in determining how all of the Caspian’s oil and gas resources would be divided up between the five states. The wider Caspian basins area, including both onshore and offshore fields, is conservatively estimated to have around 48 billion barrels of oil and 292 trillion cubic feet of natural gas in proven and probable reserves. Suffice it to say that, over and above the finer points involved that are covered in the article linked above, Russia contrived to have the Caspian re-designated as a sea, not a lake, which fundamentally altered the previously agreed split of revenues from it among the partners. In this process, Iran’s share was slashed from the 50-50 split with the USSR that it had enjoyed as from the original agreement made in 1921 (on ‘fishing rights’) and amended in 1924 to include ‘any and all resources recovered’ to just 11.875 percent. This meant that Iran will lose at least US$3.2 trillion in revenues from the lost value of energy products across the shared assets of the Caspian Sea resource going forward.

The reason why Iran accepted this appalling re-ordering of shares in the spoils of the Caspian Sea was that at the time it was in the throes of negotiating the game-changing 25-year deal with China that included a major corollary deal with Russia. This deal with Russia was a legal necessity to the 25-year agreement with China – allowing for Russian as well as Chinese planes and ships to use the dual-use sites across Iran, for example – and was added into the existing multi-layered 10 year deals that Iran had been signing with Russia to that point. It is apposite to note that Iran’s ambassador to Moscow, Kazem Jalali, said last month that this usual 10-year deal had now been superseded by a 20-year deal with Russia that covers political, security, military, defence and economic cooperation. Given these developments, then, Tehran felt in no position to start playing tough with the Kremlin in the negotiations over its share in the Caspian Sea resource.

A key element of this new 20-year agreement between Iran and Russia, and the two previous 10-year agreements that preceded it, is that Russia has de facto control over where and at what price the vast majority of Iran’s gas is sold. Controlling this potential threat to its own dominance over gas supplies into Europe – and the considerable geopolitical power over the continent that comes with this – has been a major concern of Moscow’s for many years, as has Iran’s capabilities in this respect. Iran has estimated proven natural gas reserves of 1,193 trillion cubic feet (Tcf), second only to Russia, 17 percent of the world’s total and more than one-third of OPEC’s. Additionally, Iran has a high success rate of natural gas exploration, in terms of wildcat drilling, which is estimated at around 80 percent, compared to the world average success rate of 30-35 percent. It has always been vital to Russia, therefore, to ensure that Iranian gas did not flood into Europe and thus undermine Russia’s key lever of power across the continent.

Even after the break-up of the USSR in 1991, Moscow has regarded much of central and eastern Europe as its own backyard, as most notably recently evidenced by its annexation of Ukraine’s Crimea in 2014. It has been able to continue to wield power over the continent because Russia supplies just over one-third of crude oil imports to European countries in the Organization for Economic Cooperation and Development and more than 70 percent of their natural gas imports. In some countries, Russia is the near-monopoly supplier of gas, carrying with it the threat of being cut off should Russia wish, as it did at the height of winter in 2006 and also 2009. This power of Russia over continental Europe is set to be consolidated with the completion of the Nord Stream 2 gas pipeline and the U.S. knows this. It also knows that this degree of energy dependence has been the key lever by which Russia has been able to undermine the concept of the NATO partnership to European member states and to cause friction between the various occupants of the White House and Germany – the de facto leader of continental Europe – in particular.

The new U.S. administration under Joe Biden has so far fallen short of dramatically increasing the pressure on Germany not to take the Nord Stream 2 project further. However, the new Secretary of State, Anthony Blinken, has a very clear view of what Russia is really trying to achieve with the pipeline and what the end game might be. Indeed, when he was an unknown author back in 1987, Blinken published a book – ‘Ally Versus Ally: America, Europe, and the Siberian Pipeline Crisis’ – that looked at the early 1980s threat to Europe, the U.S. and NATO, of the planned Siberian Pipeline. In 1981, then-President Ronald Reagan imposed sweeping sanctions on the project, resulting in a serious breakdown of relations between the U.S. and Europe for some time. The idea that re-engaging with Iran and ending sanctions would also enable Iranian gas to flood into Europe and so diminish Russia’s energy hold over the continent was also a key reason why former U.S. President Barack Obama and his Secretary of State, John Kerry, moved ahead with the watered-down version of the JCPOA that was finally implemented on 16 January 2016.

OilPrice.com



72 Comments on "Iran’s Huge Caspian Gas Find Is A Geopolitical Gamechanger"

  1. ExerminationIsTheOnlySolution on Wed, 25th Aug 2021 11:42 pm 

    I live among them, I spoke with them, I worked with them and I was at the receiving of the manipulations tricks. Believe me, the best course of action is to completely exterminate them. If we have to shutdown the electrical grid for ever and bring the human race at precipice of extinction (the human race is extinct anyway), so be it. It is still the best course of actions. The are extremely narcissistic.

    I am over 50 year old and I am starting to have problems relate to old age. They basically ruin the best part of my life.

  2. Biden's hairplug on Thu, 26th Aug 2021 5:42 am 

    Large British retailer “Iceland” warns that Christmas could be cancelled because of broken supply-lines and lack of transport possibilities, thanks to Brexit:

    https://www.independent.co.uk/news/business/iceland-brexit-shortages-christmas-b1908371.html

    “Iceland boss fears Brexit-linked supply chain chaos could ‘cancel’ Christmas”

    https://www.independent.co.uk/voices/iceland-christmas-cancelled-staff-shortages-brexit-b1908616.html

    “Christmas is cancelled – and the Brexiteers will tell us it’s a jolly good thing too”

    In a first reaction, turkeys and chicken have proclaimed their ever lasting support for the Brexit cause.

    Seriously, Brexit must be loved by the EU, because it is the best advertising for their EU project they could ever hope for. In Britain, Remainers are wetting their knives:

    https://www.independent.co.uk/voices/boris-johnson-joe-biden-afghanistan-brexit-b1908452.html

    “Boris Johnson’s ‘global Britain’ is obsolete after US Afghanistan response

    Joe Biden has exposed Britain’s impotence on the world stage – the UK must rebuild bridges with its EU allies”

    More Brexit fall-out:

    https://www.independent.co.uk/news/business/uk-car-manufacturing-suez-crisis-b1908969.html

    “UK car manufacturing falls to lowest since Suez crisis in 1956
    Car factories face a drop in production of a staggering 37.6 per cent”

    https://www.independent.co.uk/travel/news-and-advice/uk-holiday-staycation-expensive-italy-b1909060.html

    “LAKE DISTRICT FOUR TIMES MORE EXPENSIVE THAN LAKE GARDA AS UK HOLIDAY PRICES SOAR”

  3. Cloggie on Thu, 26th Aug 2021 5:44 am 

    Who needs solar panels and electrolyzers to produce hydrogen?

    Two major Spanish firms think they can make money from splitting water directly from sunlight (“photocatalysis”):

    https://deepresource.wordpress.com/2021/08/26/photocatalysis-solar-hydrogen-without-panels-electrolyzer/

    “Photocatalysis – Solar Hydrogen Without Panels & Electrolyzer”

  4. Duncan Idaho on Thu, 26th Aug 2021 10:31 am 

    “So, shit in the water supply, neglect the children, postpone worrying about the future, elect people who are obviously sub-mediocre and who sometimes seem sub-human, foul the air, fumble-fuck ourselves into more expensive wars, encourage xenophobia, take miracle cures intended for livestock, and generally act like loons.”

  5. Duncan Idaho on Thu, 26th Aug 2021 11:38 am 

    Michigan Federal Judge Sanctions Sidney Powell and the Rest of the Trump Clown Car Lawyers

    (lets not put down clowns by comparison)

    https://www.cnn.com/2021/08/25/politics/judge-sanctions-powell-wood-kraken-lawsuits/index.html

  6. Duncan Idaho on Thu, 26th Aug 2021 9:05 pm 

    An Alabama attorney arrested for child solicitation has a very prominent boss: Alabama Gov. Kay Ivey

    Repugs– they need to stop molesting children.
    But maybe it is just part of being a repug?
    https://www.dailykos.com/stories/2021/8/26/2048425/-An-Alabama-attorney-arrested-for-child-solicitation-has-a-very-prominent-boss-Alabama-Gov-Kay-Ivey

  7. Biden's hairplug on Fri, 27th Aug 2021 1:21 am 

    First stages of CW2 in Portland. Clashes between Proud Boys and Antifa. Since the police is as good as completely defunded there and therefor doesn’t bother to intervene (usually on behalf of Antifa), it was now an open cage fight between the right and left. And see, it was a clear victory of the Proud Boys:

    https://www.youtube.com/watch?v=tIK17paHe4U

    More in depth comments here:

    https://youtu.be/iVtVvDlhui4?t=2941

    The lefties aren’t very bright. If the system and its police are on the left, the last thing you want to do as a leftie is defunding the police, which boils down to disarming yourself.

    Afghanistan has a terrorism problem, and no, it is not the Taliban, but IS (ISIS-K), who just staged a very successful suicide attack at Kaboom, er… Kabul airport, with up to 100 dead, among them 13 US servicemen:

    https://edition.cnn.com/world/live-news/afghanistan-kabul-taliban-us-news-08-27-21/index.html

    Covid is only beginning:

    https://edition.cnn.com/2021/08/26/health/us-coronavirus-thursday/index.html

    “With more than 100,000 people in the hospital with Covid-19 in the US, this August is worse than last, expert says”

    https://www.dailymail.co.uk/health/article-9930855/Natural-immunity-Covid-infection-stronger-vaccination-Israeli-study-suggests.html

    “Natural immunity from Covid infection could be stronger than vaccination in protecting against Delta variant: Recovered patients are 13 TIMES less likely to be infected than those who have Pfizer jabs, Israeli study suggests”

    There is a superb reason to be skeptical about vaccinations. They are immature, hardly tested and severe possible side effects. The best strategy seems to be: strive for maximum health (get rid of those kilos until you ruthlessly have achieved BMI-21), exercise at least 1 hour per day, eat little, stop drinking, avoid unnecessary risks, like planes and stadiums, avoid vaccination if you can (I certainly do) and wait for the first real relief: cheap, frequent, rapid on-the-spot testing, so we can isolate infected early on and strive for zero-covid.

    CEO Pfizer:

    https://www.telegraaf.nl/nieuws/1723952214/topman-pfizer-er-gaat-een-variant-opduiken-waar-vaccin-geen-grip-op-heeft

    “There will be variants on which our vaccines won’t have any grip”

    That’s good to know! The idea to jab the entire population every few months or so against all sorts of mysterious variants with untested pharmaceuticals, isn’t going to fly. You can do that perhaps for old, weak, vulnerable people, but certainly not for children.

    Covid will help bring about a new, more localized society, without mass travel. And that is good for the environment and scarce resources anyway. It will bring back borders, which is a white nationalist dream coming true. It will kill globalism once and for all.

  8. Biden's hairplug on Fri, 27th Aug 2021 10:59 am 

    The controlled media are preparing the populace for the immanent dumping of Biden:

    https://www.dailymail.co.uk/news/article-9931085/Joe-Biden-tense-forth-interesting-guy-Steve-Doocy-Fox-News.html

    “Nowhere to hide, Joe: President adopts fetal position as he crumbles under questioning and tries to blame Trump for Afghanistan catastrophe after 13 troops were killed along with 90 Afghans in ISIS bomb attacks”

    He is just another “old white guy”, you see.

    His only function was to sneak in a woman of color as Veep into the White House, as a shrewd way to circumvent cumbersome elections, in which she would not have had a chance anyway.

    It’s the same scheme with which they got the Texan Jew LB Johnson elected as well.

  9. Duncan Idaho on Fri, 27th Aug 2021 12:16 pm 

    The foul stench of anti-vaxxer love for Ivermectin should be a sign…

    https://www.dailykos.com/stories/2021/8/26/2048367/-The-foul-stench-of-anti-vaxxer-love-for-Ivermectin-should-be-a-sign

  10. makati1 on Fri, 27th Aug 2021 4:28 pm 

    Duncan, and humans are not animals? What are we? Vegetables? Minerals? Well, yes, we are made up of minerals, but so are plants and everything else.

    I have read a lot of articles from around the world about Ivermectin and all are positive in its use to treat the flu. But it is cheap and not profitable for Big Pharm. And would not allow the psychopaths to rule the world.

    Funny if it can be used on human sized animals and not humans. The author of your ref may not even exist. Mine have been around for as long as I have and have a real medical background and reputation.

    He mentions danger from Ivermectin. That is a belly laugh! Tens of thousands of deaths from the GMO JAB, so far, and millions of serious illness are “safe”?

    BTW: ALL meds have side effects. Temporary diarrhea vs death. Which would you choose?

  11. Duncan Idaho on Fri, 27th Aug 2021 5:40 pm 

    “I have always found it quaint and rather touching that there is a movement [Libertarians] in the US that thinks Americans are not yet selfish enough.”
    ― Christopher Hitchens

  12. Cloggie on Sat, 28th Aug 2021 3:28 am 

    Germany signs hydrogen deals with Egypt and Namibia:

    https://deepresource.wordpress.com/2021/08/28/germany-signs-hydrogen-deals-with-namibia-and-egypt/

    China wants to build railway-link with Russia, Canada and the US. Beijing-Los Angeles in 48 hours:

    https://www.youtube.com/watch?v=fzl11OAg-mE

  13. Duncan Idaho on Sat, 28th Aug 2021 11:12 am 

    Georgia cop who pushed people to take horse dewormer instead of vaccine dies from COVID-19

    Getting rid of the stupid—-
    https://www.alternet.org/2021/08/goergia-cop/

    Most pigs are not that smart.

  14. Davy on Thu, 2nd Sep 2021 9:43 am 

    u can get pdf of elite whitey supertard AS 2hunder years together and u can get audiobook of it too about 40 hours so u can listen while driving. u can get audiobook of elite whitey supertard william shirer the rise and fall of the third reich too. please feel at ease among friens we’re all lovers of supremacist muzzies here.

  15. elite whitey supertard alexander solzhenitsyn on Thu, 2nd Sep 2021 2:44 pm 

    u can get pdf of elite whitey supertard AS 2hunder years together and u can get audiobook of it too about 40 hours so u can listen while driving.

    u can get audiobook of elite whitey supertard william shirer the rise and fall of the third reich too. please feel at ease among friens we’re all lovers of supremacist muzzies here.

  16. elite whitey supertard william shirer on Thu, 2nd Sep 2021 2:46 pm 

    u can get pdf of elite whitey supertard AS 2hunder years together and u can get audiobook of it too about 40 hours so u can listen while driving.

    u can get audiobook of elite whitey supertard william shirer the rise and fall of the third reich too. please feel at ease among friens we’re all lovers of supremacist muzzies here.

    please speak low english only

  17. joint statement of elite whitey supertard alexander solzhenitsyn and elite whitey supertard william shirer on Thu, 2nd Sep 2021 11:40 pm 

    u can get pdf of elite whitey supertard AS 2hunder years together and u can get audiobook of it too about 40 hours so u can listen while driving.

    u can get audiobook of elite whitey supertard william shirer the rise and fall of the third reich too. please feel at ease among friens we’re all lovers of supremacist muzzies here.

    please speak low english only

  18. emergency transmission joint statement of elite whitey supertard alexander solzhenitsyn and elite whitey supertard william shirer on Fri, 3rd Sep 2021 9:41 am 

    u can get pdf of elite whitey supertard AS 2hunder years together and u can get audiobook of it too about 40 hours so u can listen while driving.

    u can get audiobook of elite whitey supertard william shirer the rise and fall of the third reich too. please feel at ease among friens we’re all lovers of supremacist muzzies here.

    please speak low english only

  19. Biden on Sun, 5th Sep 2021 7:19 am 

    Lol

  20. Antius on Sun, 12th Sep 2021 11:36 am 

    Europe appears to have sleep walked into an energy crisis.
    https://oilprice.com/Energy/Energy-General/Record-Breaking-Energy-Prices-Could-Soar-Even-Higher-In-Europe.html

    Having closed legacy coal and nuclear power plants, the continent is now heavily dependant on natural gas, that it cannot produce domestically in sufficient quantities. And it looks like Uncle Vlad doesn’t have enough dinosaur farts to keep both China and Europe adequately supplied. So they prioritise China, their geopolitical ally, which is able to pay more given that they actually uses the NG to make stuff.

    There is too much wishful thinking and too much political idealism in Europe. This board is a microcosm of that foolish idealism. There is too little technical understanding of how energy systems work and no understanding that the economy is an energy system. Europe has basically committed itself to a natural gas energy system, with some expensive wind and solar power projects thrown in in an attempt to reduce the fuel bill. Only the fuel doesn’t appear to be there in sufficient quantities and others want it too.

    It is now over sixty years since mankind first developed nuclear fission as a practical energy source and thirty years since closed fuel cycle fast reactors were demonstrated as an affordable and sustainable electricity source that can be built anywhere. And yet here we are in 2021, trying to power a continent using wind mills, even more vulnerable to fossil fuel depletion and supply disruption than we were 50 years ago. People that stupid deserve to freeze in the dark.

  21. Antius on Sun, 12th Sep 2021 12:02 pm 

    ‘Germany signs hydrogen deals with Egypt and Namibia’

    Great. The Germans are going to invest billions of Euros to build low EROI intermittent electricity sources in a flea bag African country on the wrong side of the Sahara desert. They are then going to spend even more money on an electrolysis plant, which will consume 100 units of prime electricity to produce maybe seventy units of highly diffuse gaseous chemical fuel. Somehow they have to get this back to Europe. That means either liquefaction at a temperature of 20 Kelvin and then filling a cryogenic tanker, or compression and pumping through thousands of kilometres of low alloy steel pipeline, over the Sahara, under the Mediterranean to Europe, where presumably, it will be burned in a combined cycle gas turbine to produce electric power. You would be lucky to recover one third of the original electrical energy. One wonders if this scheme will generate any net energy, considering the embodied energy of wind and solar stuff, the electrolysis plant, the thousands of km of pipeline and all the parasitic energy losses at every stage of the process.

    The fact that this is actually being considered and funded, suggests either stupidity and ignorance, or plain desperation. Cloggie clearly needs to develop a more critical eye and call bullshit on these ‘sustainable’ initiatives.

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