Iran sent its first drilling rig into the Caspian in 1996. It found nothing. Iran sent its second drilling rig into the Caspian in February 2010 to drill three test wells. It still hasn’t finished even one and now says it hopes to finish that first well by next March.
It is still far behind its four fellow Caspian coastal states.
Iran spent more than $500 million to build and install a semi-floating drilling platform, named Iran-Alborz, and put supply boats into place, Mahmud Mohaddes, National Iranian Oil Co.’s director for exploration, told Bloomberg news in an interview in Tehran.
The well is partially drilled, and the company aims to complete it by next Now Ruz, he said. Iran has been slower to explore for energy in the Caspian and doesn’t produce any oil there yet.
Kazakhstan plans to begin producing as early as next year in the northern Caspian at Kashagan, the world’s fifth-largest oil field, where the partners include Eni SpA, Exxon Mobil Corp., Royal Dutch Shell Plc and Total SA.
In Azerbaijan, BP Plc leads a group pumping oil at the Azeri- Chirag-Guneshli project, the largest field under development in Azerbaijan’s sector of the Caspian basin, according to BP’s website.
“Iran has had challenges attracting investment and is the Caspian nation that has lost the most on that front,” Abbas Maleki, director general of the International Institute for Caspian Studies, told Bloom-berg. Maleki is a former deputy foreign minister.
The five littoral nations—Iran, Azerbaijan, Russia, Kazakhstan and Turkmenistan—have disagreed over how to share the sea and its resources ever since the collapse of the Soviet Union 20 year ago in 1991. Iran wants the landlocked sea split into five equal parts, 20 percent for each, while the other four seek a more traditional division based on their respective shorelines, an arrangement that would limit Iran to 13 percent.
Iran has held up any treaty dividing the Caspian for two decades now. It has also insisted that no country can explore for oil until there is a treaty on borders. But Iran has ignored its own declared policy by sending two rigs into the Caspian.
Iran was unable to ship a semi-floating platform to the Caspian from outside the region because the sea is landlocked and Russia controls the only access to the sea by canal. Apparently, Russia refused to allow Iran to use the canal.
As a result, Iran had to built the rig on the Caspian coast.
Media reports have described the Iran-Alborz as Iran’s first drilling rig in the Caspian. But back in 1996, then-President Ali-Akbar Hashemi-Rafsanjani inaugurated the Iran-Khazar drilling rig in the Caspian and that was lauded as Iran’s first Caspian drilling rig.
Two years later, however, Iran leased the Iran-Khazar rig to Dragon Oil, which has been using it ever since to explore off Turkmenistan in the Caspian.
Many news reports in the Islamic Republic have described the Iran-Alborz as an entirely Iranian product. UPI, however, said the design was provided by the Swedish firm, Gotaverken, and actual construction was overseen by another Swedish firm, Sadra.
Azerbaijan was initially very concerned that Iran would force a confrontation by trying to drill for oil in the portion of the Caspian claimed by both countries. But Xalaf Xalafov, Azerbaijan’s deputy foreign minister, announced that the Iran-Alborz was not drilling in the disputed zone.
Iran’s 20 percent claim would give it possession of a few oilfields that Azerbaijan has discovered. Several years ago, an Iranian warship and combat aircraft drove off an Azerbaijani research vessel that was trying to start work on one of those fields. Azerbaijan has not gone to any of those contested fields since then.
It appeared to some analysts that Iran was content to leave those fields alone for now so long as Azerbaijan also ignored them.
Iran says it has found 46 possible oilfields in the Caspian.