Iran announces discovery of massive oil field

President Hassan Rouhani has said that the find would boost its proven reserves by about a third. (Photo: PTI)

Iran has discovered a massive new oil field, President Hassan Rouhani said ON Sunday, a find that would boost its proven reserves by about a third in a rare piece of “good news” for an economy battered by US sanctions.

In a speech aired on state TV, Rouhani said the country’s economy had stabilised despite punishing US measures against its senior leaders, banking and finance sectors.

The vast field in the southwestern province of Khuzestan holds an estimated 53 billion barrels of crude, he said. The 80-metre deep reservoir stretches nearly 200 kilometres from Khuzestan’s border with Iraq to the city of Omidiyeh.

“This is a small gift by the government to the people of Iran,” he said in a speech from the central city of Yazd.

“We announce to America today that we are a rich nation, and despite your enmity and cruel sanctions, Iranian oil industry workers and engineers discovered this great oil field.” The find would add around 34 percent to the OPEC member’s current proven reserves, estimated by energy giant BP at 155.6 billion barrels.

Iran, a founding member of the Organization of the Petroleum Exporting Countries, sits on what were already the world’s fourth-biggest oil reserves. The new reserves, if proven, would lift it to third place, just before regional arch-rival Saudi Arabia. But it remains to be seen how much the country can benefit from the new field.

Iran has struggled to sell its oil since US President Donald Trump withdrew from a landmark 2015 nuclear deal last year and reimposed unilateral sanctions.

Iran has experienced a sharp economic downturn this year, fuelled in part by US sanctions, with a plummeting currency sending inflation skyrocketing and hiking the prices of imports. The IMF has said Iran’s economy will contract by a massive 9.5 percent this year, its worst performance since 1984 when the Islamic republic was at war with neighbouring Iraq, but notes the growth is expected to stabilise at zero next year.

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