Iran’s oil future and Iran’s priority today
So far, nearly half of the world’s proven oil reserves, including crude oil and condensate, have been extracted, but although Iran was one of the first countries to begin commercial oil production, it has harvested just over a third of its proven reserves, so the difference is significant. In the process of oil extraction, there is a gap between Iran and the global average. Is this difference a strength? Is more oil extraction a misuse of this God-given gift? Is not extracting oil an asset to future generations? Answering these questions and making the right plans and making smart decisions about today’s priorities in the country’s oil industry requires a comprehensive and realistic picture of the state of supply, demand, and the overall future oil trade in the world. If we see a decrease in supply or increase in demand for crude oil in the future, the difference between Iran’s oil production trend and the global average may be considered a strength, because our country is still able to meet demand and benefit from future economic conditions, but statistics. And global oil production and consumption figures, forecasts for future institutions, world-renowned research, and the behavior and policies of the world’s leading countries show that demand will approach the end of supply sooner than supply, and so in the future, having surplus reserves will not only be an advantage. Rather, it means losing previous opportunities to make the most of the golden age of oil.
The world’s energy consumption pattern will change dramatically over the next three decades. Today, most of the crude oil is used in transportation, but electric cars are being produced and supplied at breakneck speed, and forecasts show that by 2050, more than half of the world’s electric vehicles will be in motion, a significant drop in demand for products. It will lead to oil. The use of new and renewable energy is also increasing exponentially, especially in developed countries. These energies, and in particular the solar and wind energies, not only address the environmental concerns of fossil fuels, but more importantly, they have a very good economic justification. Today, the cost per kilowatt of solar power or wind power is less than one kilowatt of fossil fuels, and in the near future, due to technological advances and the ongoing infrastructure, this distance will be even greater. At present, more than 600 gigawatts of installed capacity of solar power plants and the same installed capacity of wind power plants (1,200 gigawatts in total) are worldwide, and the capacity of this type of power plant is expected to exceed 14,000 gigawatts by 2050. To better understand these figures, we can look at the total 90 gigawatt capacity of Iran’s power plants, which are mostly fossil fuels. Given that non-combustible oil applications, such as chemical and petrochemical products, also make up a small portion of the oil demand portfolio, they cannot play a decisive role in changing demand.
The economic and environmental benefits of renewable energy are such that many developed countries in Europe, North America, East Asia and Oceania have targeted the years 2020 to 2050 as fossil fuel-free years. This shows their serious determination to replace fossil fuels in the near future. At the same time, as these countries have a significant impact on the policies of the international community, it is to be expected that, in parallel, new and more stringent environmental regulations will be adopted in international institutions and restrictions on fossil fuels and their use will be restricted.
In terms of supply, the United States has the highest daily production of oil and condensate with 12.5 million barrels, Saudi Arabia with 12.5 million barrels, Russia with 11.5 million barrels, Canada with 5.5 million barrels and China with 5. It’s a million barrels. The five countries together account for more than half of global production and now all produce the largest and most unprecedented amount of oil. With such a rapid trend and a percentage of new discoveries, their reserves will meet market demand in two to five decades, and their policies and behaviors do not seem to have a plan for the energy market after this period. In particular, these countries appear to have made serious plans to reduce their supply while reducing demand by maximizing their reserves. Many other oil-producing countries are in a similar situation. In Iran, however, with the current trend of crude oil and condensate extraction, which has never reached 5 million barrels per day in the last four decades, and there is currently no better horizon for at least the next five years, it will take another century. To extract all known reserves so far. Naturally, with the discovery of new reserves, this time will be even longer.
Given what has been said, and considering the crude oil supply and demand market in the coming decades, the development activities and reservoir discharge rates that we are witnessing in the country today are not commensurate with the global trend and will be a good place for Iran in society in the future. The international will not decide. There is serious concern that oil will be available in the country’s reservoirs for another three decades, but its extraction will face environmental constraints and little economic justification. This means that we and future generations may lose the opportunity to use part of our country’s oil reserves forever, so the approach of delaying oil extraction and maintaining this wealth on earth does not have sufficient executive guarantees for future generations to benefit. Strategic is the acceleration and increase of oil production and production of petroleum products and the inflow of value created towards investment to strengthen the country’s public infrastructure and develop new and renewable energy infrastructure. In this case, great care must be taken not to spend the extra income on the current expenses of the country. Thus, the strategic approach should be to protect the oil wealth, rather than the oil itself.
Therefore, we urgently need a national understanding at the level of decision-makers and decision-makers – which, incidentally, are also numerous – to determine and stabilize the country’s development direction and, in its shadow, oil development. Unfortunately, obtaining such an understanding is not easy, and its absence leads to intellectual fragmentation of managers and experts, confusion in decision-making, creating friction in executive affairs, and depreciating the country’s efficient human capital. Also, considering the average lifespan of oil fields, we do not have much opportunity to make decisions about the process of oil extraction and development, and over time, the opportunity to make decisions becomes more and more limited. Achieving such an understanding requires that attention to the future, given the realities of the country and mental training in this regard, become a habit for decision makers and decision makers to form a clear, comprehensive and integrated picture of the future horizon in their minds. In this case, it can be expected that achieving a general understanding of the path and the way of development will be easier. Therefore, the most important goal of this text is to create sensitivity to the future of oil and to try to create a common discourse in this regard at the level of experts, managers, decision makers and energy decision makers. If the national understanding at the level of energy decision-makers and decision-makers is as follows, it can be hoped that they will see the increase in oil production and related development activities as a national necessity and priority in order to eliminate barriers and strengthen factors. Take a quick step. In this case, the three main areas should be given maximum attention:
First, the development of the upstream oil sector requires huge investments due to high risks and high costs, so investment in this sector should become one of the most attractive areas of investment in the country, especially for Iranian investors and especially the private sector. In this case, the resources of various capitals, even stray capitals, gradually flow into this sector. At the same time, whenever international political conditions allow, serious attention must be paid to attracting foreign capital. Secondly, whenever possible, global cooperation should be used to the maximum of global capacity to attract new technologies and learn top management methods, but in addition, the use of management capacity and technical, technical and executive capacity within the country is very important.
Attention to internal power has become increasingly important at a time when we face restrictions on international interaction. The country’s companies, institutions and specialists have very good capacities; However, these capacities are scattered and need to be reorganized. If we pay attention to them and align them with each other, we can hope for significant success. Third, the country’s administrative and regulatory infrastructure is by no means conducive to rapid development. Numerous, ambiguous, contradictory and inefficient regulations, extensive and cumbersome bureaucracy, long and breathtaking administrative processes, managers’ daily lives and their preoccupation with administrative subdivisions diminish and limit the process of timely, balanced and sustainable development, so take action to alleviate Regulation and streamlining of processes in the field of oil development is one of the most important measures.
We hope to create a better future for our beloved country by paying more attention to the future of the country’s energy, creating a constructive discourse and achieving national understanding.